Daughter Not Liable For Student Loan Taken By Father On Her Behalf
- June 10, 2013
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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 The Appellate Court in its unpublished opinion of Educap Inc. v. Davis, upheld the lower court’s opinion that the former student had neither expressly nor by implication agreed to repay the loan and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.