Co-signers

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A person who signs an official document (such as a loan, contract, or law) with another person; a person who cosigns something; a joint signer of a promissory note.

Most courts find the exception to discharge for student loans applies not only to student borrowers but also to parents, spouses, or non-relatives who co-sign a student loan. Early on, the courts were divided over this question. The arguments in favor of excluding co-obligors from the discharge exception focused on several rationales. First, several courts held that the co-obligors’ debts were not “educational loans” because the co-obligors did not use the loan proceeds for their own educational benefit. Second, granting discharge for co-obligors furthers the “fresh start” goal of bankruptcy. Third, the legislative history of the discharge exception focused on students about to embark on lucrative careers and the perception that these recent graduates might abuse the bankruptcy discharge option to the detriment of the loan programs. Presumably, these abuse considerations would not be as compelling in cases involving middle-aged parents.

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