Legal Question in Bankruptcy in Minnesota

I have two questions. 1. we are in chapter 13 and our kids are now getting to college age. Can we co-sign a student loan while we are still in chapter13? 2. Also, our home value is way less than what we currently owe on the home. (current value $170,000 we owe $230,000 on the first loan and $49,000 on the second mortgage) Will that difference be discharged with the chapter 13 discharge?

Asked on 10/03/11, 12:19 pm

1 Answer from Attorneys

Nathan Hansen Nathan M. Hansen, Attorney at Law

Whether you can co-sign on student loans is likely up to the lender. I advise everyone in every single circumstance to NEVER co-sign on student loans. It's a terrible thing to do. Have your kids go to cheaper schools. Student loans are not dischargeable in bankruptcy and student loan people make the IRS look like your friend.

The home value will not be discharged in your Chapter 13. You could possibly modify your plan to "strip-off" your second mortgage. This is now allowed in Minnesota.

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Answered on 10/03/11, 12:29 pm

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