Student loans may be some of the worst financial burdens current generations
face, dragging them down for years after completing college and keeping
them fearful of flat-out bankruptcy. But what happens if someone who owes
money for student loans passes away? Does that heavy weight disappear?
The answer depends on numerous circumstances.
If the decedent owed money for a federal student loan, it is likely that
it will be eligible for a death discharge – a removal of all debt
when the debtor passes away. If it was a federal Parent PLUS Loan, it
is even possible to receive a death discharge if the parent relevant to
the loan passes away. Other than needing an official death certificate,
death discharges also require complicated filings with one or more government
bodies. If you want to know if your student loan is eligible for death
discharge, you should
contact Kansas bankruptcy attorney Rick Hodge, Attorney at Law.
In situations involving a private student loan, most cases are
not eligible for death discharges. If the money owed can't be paid off
by pieces of the decedent's estate, any co-signers on the loan or
any close relatives may be required to inherit the debt themselves. In
addition, private student loans can trigger an acceleration clause upon
the debtor's passing. If it does, lenders can pursue any remaining
payment of the loan
Depending on the details of your loved one's passing, life insurance
or medical insurance might not provide you with enough financial relief.
If you are unprepared to cover student loans yourself, you could find
yourself sinking into debt and on the verge of bankruptcy. To avoid the
harshest consequences of this burden, contact Attorney Rick Hodge today.
Our team offers
free consultations and can help you determine the right choice for your financial situation,
including options to file for
Chapter 7 or
Chapter 13 bankruptcy.