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Student loan/Bankrupcy?

Hello, my wife’s father is going into bankrupcy and now we are getting letters from wells fargo about a student loan not being paid. He is telling us not to pay it because it was a personal loan for her education and she is not responsible and now they are just going after her because he is going through bankrupcy. I pulled her credit and the wells fargo loan was on their with him listed as a cosigner, I also found our credit reports from our refinance last year and that loan was listed on there pre any problems. When I confronted him with this information of the pre problem credit info, he confessed it was a parent student loan but that it was definitely in his name and he had no knowledge of her being a cosigner in any way. Then I told him the current credit report lists him as the cosigner and he said they must have “switched” him from payee to cosigner(which i dont believe, think he was always paying it under her name) since he wasnt paying. So my question is:

Not that it matters because I know she will still be liable since she was involved before any problems, but if someone defaults on a loan do they actually switch the payee and cosigner? I figured they would just go after them as a cosigner, not turn them into the payee. Thanks for any help, this is the last thing I need to know before I can call total bullshit on him! I think he knows everything and is trying to get the loan to default to him so it can be swept away in his bankrupcy but I would rather just pay the loan than have it wreck my wife’s credit which he doesnt seem to care about
Thanks, It is a private student loan

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4 Responses to "Student loan/Bankrupcy?"

  1. SPIFIMAN1 says:
    First of all no lenders do not switch signers. There is no reason. Co-signers are just as legally responsible for paying a loan as the primary signer.

    Second if the loan is backed by the Government it can not de discharged in a bankruptcy.

  2. cruiser says:
    I have never heard of a Company switching from Payee to Cosigner. If your iwfe is listed as the Principal borrorer rhan she is the one that is actually liable for the loan, If she cannot pay it then they go after the cosigner. I call BS on your father in law. You will have to pay the loan off so as not to ding your wifes credit. Sorry
  3. bloomorningglory says:
    No switching, and it’s a stupid lie as it wouldn’t matter anyway since they go after both :) Smart to take care of it since student loans generally can’t be swept away with bankruptcy. Good luck!
  4. rpf5 says:
    Are you really sure it is a private loan?? l doubt it. i can’t imagine Wells Fargo not taking some federal aid on that loan, it guarantees that they get the money back as you can’t bankrupt out of any federally assisted student loan. Think of it as an insurance policy, it keeps people from doing what you are trying, to skip out on a loan. l would get that information verified as he has given you conflicting information on the other stuff.

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