Student Loan Debt, Dead Cosigner, and an Estate with a Sibling (Questions!!!)

[dirtgoblin]

wasn't sure where to post this --- also posted it to the Debt Collection forum

What is the name of your state (only U.S. law)? New Jersey


Hello. I have a few questions in regarding a situation I have currently found myself in.

I have 4 private NJCLASS loans through HESAA in the state of NJ. These were co-signed with a parent who recently passed away. I have been trying to find any information on what happens when a co-signer passes away to the loan, if the lender can still go after the co-signer's estate after they die. I have been pouring through HESAA's website for the loan term agreements, but cannot find anything. I do not have access to the original documents at the moment, as I am not living where they are currently stored (across the country).

My concerns are the following. The co-signer's estate included 2 houses, now left to myself and a sibling. However, I do not want my sibling to be on the hook for my debt.

When the co-signer dies, am I the only one that can be held accountable for the loan? Or can the company still make a claim after my mother's estate? Furthermore, if I inherit 50% of the co-signer's estate with my sibling, does that once again allow the loan company to come after it...and if so, would disclaiming the inheritance of the estate protect it for my sibling?

Thank you,

DG

 

[justalayman]

You should delete one of the threads. Most posters cross post in many forums. It will be seen.

 

[justalayman]

If the co-signor dies while the loan is in good standing, the creditor will not take any actions against the cosignors estate. If the loan is in default, the creditor could make a claim against the cosignors estate as the obligation of the cosignor to pay the delinquent amount would have been activated.

While you can generally disclaim an asset from a decedent, the creditor can file a claim against the estate arguing your intent is to defraud them and prevent them from collecting what is legally due them. If the loan is already in default, it doesn't matter as your mother is liable for
The debt and the creditor can make a claim directly against your mothers estate. That debt will have to be paid before anything is distributed to the heirs.

So, are the loan payments delinquent?

 

[adjusterjack]

When the co-signer dies, am I the only one that can be held accountable for the loan? Or can the company still make a claim after my mother's estate? Furthermore, if I inherit 50% of the co-signer's estate with my sibling, does that once again allow the loan company to come after it...and if so, would disclaiming the inheritance of the estate protect it for my sibling?

If the debt is in default then the co-signers estate is responsible for the entire debt. The estate pays first and, if necessary, will have to sell assets before anybody inherits anything. Might have to sell one or both houses if the estate is cash poor. That means that neither you nor your sibling inherit anything until the debt is paid and then the two of you get what's left.

Disclaiming your inheritance doesn't change that.