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Aggressive creditors harass father for son's unpaid loans

In a tragic case that demonstrates the aggressive tactics taken by creditors, a man continues to be harassed to pay the debts of his dead son who was killed in a rollover accident within months of graduating from college. The bereaved father has received notices, phone calls and threats from creditors who claim he is still obligated to pay.

While the man is pursuing bankruptcy options, his legal troubles are far from over and there is no clear relief available.

The harassment began only months after he buried his son who had been the first of his family to go to college. The father had co-signed on a very substantial private student loan for his son to attend Boston's Berklee College of Music. According to the loan documents, co-signers are liable in the event that the debtor is unable or unwilling to pay. This was a huge sacrifice for the father, a naturalized American citizen, originally from Mexico, who made only $21,000 a year in 2011, according to his tax return.

The trouble with repayment of the loans is not only his inability to pay, being the sole provider for his family, but also he has been unable to determine exactly how much he owes or what company holds the loans. For the grieving father, there has been no end to the harassment and the debt collectors have been relentless calling his house several times a day for a year and a half.

The legalities of this case are also complicated. While federal loans are forgiven if a student dies, private loans rarely discharge debt in the event of a borrower's death. The family does not know where to turn to appeal the case, but it seems that none of the creditors are willing to work out a solution, continuing to tack on late fees and interest, a significant burden for a family that is quite simply, unable to pay.

Even with a lawyer, the options for the family are limited; generally, private loans are not dischargeable through bankruptcy. For now, the family hopes to successfully discharge the loan under the provision in the bankruptcy code called the "hardship discharge," which will still be a feat, considering that proving "undue hardship" is difficult. Still the family is hoping for the best and waiting for a ruling from the bankruptcy judge.

Source: Pro Publica, "Grieving Father Struggles to Pay Dead Son's Student Loans," Marian Wang, June 14, 2012

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