Daughter Not Liable For Student Loan Taken By Father On Her Behalf

Creditor could not hold a former student liable for repayment of a student loan applied for by the former student's father (debtor) who was obligated under his Property Settlement Agreement at the time of his divorce to pay for her college expenses. Creditor produced loan documents which listed the former student as "borrower" and her father as a "co-signor" and which creditor claimed was executed by the former student. Creditor was successful in obtaining a judgment against the former student's father. The court however found the former student's testimony credible when she testified she had not signed the loan documents or had any knowledge of the loan. Her mother's testimony corroborated her testimony and her father was unable to identify the signature on the loan documents as that of his daughter and he claimed he did not know how the signature got on the documents. The court held that the father's testimony was not believable because he prepared the loan documents. The Appellate Court in its unpublished opinion of Educap Inc. v. Davis, upheld the lower court's opinion that the former student had neither expressly nor by implication agreed to repay the loan and though she benefited from the loan by being able to go to school it was the father's sole obligation to repay the student loan which he arranged for in compliance with his obligation under his divorce agreement. To hold the former student liable for her father's debt would be inequitable. If you are having problems with creditors due to student loan debt you should consult with an experienced consumer debt attorney immediately to protect your rights. For more information regarding student loans, bankruptcy, foreclosure, or other consumer debt related matters in New Jersey visit TheNJBankruptcyAttorney.com. This blog is for informational purposes only and is in no way intended to replace the advice of an attorney regarding your specific matter. Our law firm is a debt relief agency and helps people file for bankruptcy relief.

Overhaul to Student Loan Collections Considered

Congress will review the idea of implementing the system used in England for collection of student loans. The current system in the United States often involves debt collection agencies hounding the unemployed without offering mention of available payment deferral programs. The system Congress is pondering will be the use of automatic withdrawals from borrower's paychecks based on their earnings. The withholding would operate like tax withholding or the withholding of child support and alimony by employers when directed by court order. The withholding amount would be at a maximum of 15% of borrower's disposable income after an allowance for living expenses. Proponents hope this will begin to decrease the $1 trillion student loan debt outstanding and eliminate the use of private debt collectors which add hefty fees to the loan balances leaving those responsible for student loan repayment in deeper debt. If you are behind in student loans or other debt you should seek experienced legal counsel immediately in order to protect your rights. For more information on foreclosure, bankruptcy or other consumer debt related matters in New Jersey visit TheNJBankruptcyAttorney.com. This blog is for informational purposes only and in no way intended to replace the advice of an attorney regarding your specific matter.