The loans came due and my daughter didn't have a job after graduation so they went after the co-signer, my mother-in-law. She didn't have the funds to pay so she made up the statement that I forged her name. She has told this statement to many people including our Deacon and Priest and has ruined my reputation with what used to be friends.
Employment / Labor Attorney
If she is intentionally publicizing false statements, which she knows to be false, regarding you which harm your reputation, you may have a case. Your case may be even stronger that the typical case because what she is accusing you of constitutes a crime. However, has your reputation been severely damaged or do most people believe she is lying? If your main goal is to get her to stop, I suggest you engage an attorney to send her a cease and desist letter. If she continues after that, your case gets even stronger.
Possibly. Mother in law is accusing you of, essentially; a crime, telling other people about; the statement would seem to be the type of statement that would cause injury to reputation; and if you are to be believe, the mother in laws claims are false. On the face of what you describe, you possibly have a defamation claim. So, that is the "general" legal answer.
Now for the practical reality. Suing someone for defamation is a lawsuit (and not a small claims case). Everyone involved is a witness. Do you really want to drag your deacon and priest through court, among others. No such thing as an attorney that takes these cases on contingency. Especially given that the target cannot pay student loans, you will need to pay attorney fees out of pocket and unless mother and law has assets, you will probably never actually recover any money. So, how much money is it worth to clear your name, $10,000, $20,000+.
If you really want to pursue it, you will need to talk to a civil litigation attorney.
Insurance Law Lawyer
You can retain a local defamation lawyer, but keep in mind that they typically want 5k to begin work.
Criminal Defense Attorney
Your mother-in-law is using spoken words alleging that you have committed a crime. This is actionable per se (meaning it is so bad, that you don't have to show damages) if the crime she claims you have committed is one which would be an indictable offense. Forgery for the amount that would probably be stated in the load, is most likely at least 2 indictable offenses. So, yes you appear to have a good case. If the attorney prosecuting the case for you feels there is not enough for contingency, and you state MIL does not have money, s/he may require doing this for a fee (typicaly hourly). Do an asset search on her to see what you can reach in a law suit pursuant to a judgment. I have had situations in which I was retained to prosecute in similar situation, and paid to do so, and though the lawsuit had merit and could have gone forward, the client wanted to teach the defendant a lesson and wanted a public apology, which when gotten, resulted in dropping the law suit. So you can decide what you would like to do.
If you found this "helpful" or "best answer," please click it with my appreciation. My response is for educational purposes and does not constitute legal advice nor creates an attorney client relationship which requires all the details and a personal conference.