My Dad lives with me because of his crushing student loan debt (over 200k) he could never pay off during his working years. A divorce and bad financial planning put him in this boat. He now lives with me full time and does not work he is 67, receives some soc. sec. but not much. If I claim him do I somehow become responsible for his student loans which are currently compounding interest, I did not sign or have anything to do with the loans.
being a good kid will not make you liable for his debts, unless you sign an agreement to be responsible. So, don't sign nuthin.'
Are his loans Federal? Is he disabled? If your answers are yes and yes, he may be eligible to get his loans forgiven. If they are private loans he might also get forgiveness if he is disabled.
You and he might think he is not disabled, but if he can't work due to physical or mental problems, he might meet the disability test.
No. Claiming him as a dependent does not make you responsible for his debt. If you do file as a household of two, expect to be asked about whether he contributes any money toward household expenses. If he doesn't, then expect to be asked why he doesn't do so.
No. You are not responsible for your dad’s loans unless you co-signed them.
If your dad has Federal student loans and they are in default, he can be subject to a wide range of consequences. Including but not limited to administrative wage garnishment, Tax Refund Intercept, Social Security Offset, denial or revocation of security clearance for a federal employee, Federal or State licensing can be in jeopardy or a lawsuit.
He should do the following. To confirm what kind of student loan he has, go to the National Student Loan Data System. NSLDS.ed.gov. Select Financial aid review and then accept or decline to use the system. Then log in with his username and login. If he does not have one he can establish one. He should see a complete list of all of his federal student loans. Anything with a yellow triangle and red exclamation point is in default. Once he has confirmed the kind of student loan he has and the status of the loan or loans he can take action to get some relief.
There are a number of income-based repayment plans that help him get both delinquent loans and defaulted loans current and with a payment, he can afford. The income-based programs are based on one's adjusted gross income. In some situations, the payment could be as low as $0.00. In 2015 the Department of Education collected $171 million through Social Security offsets. It was determined that nearly half of borrowers age 50 and older had held their student loans for 20 years or more. It does not have to be these way. If your dad applies for an income-driven repayment plan (IDR) he must recertify once a year, otherwise, the payments revert and he could fall into default and be subject to the social security offset. The website will allow him to calculate his payment based on his adjusted gross income.
If his loans are not listed on the NSLDS site they could be private loans which include State loans and private loans. These loans are not eligible for any of the solutions described above. He will need to contact those lenders to see what options they offer. Contact a local student loan attorney in your area if you need more help. You can search for an attorney using the Avvo "Find a Lawyer" link at the top of this page.
Nels Hansen is a bankruptcy lawyer in Round Rock Texas and accepts clients in Austin, Georgetown and Pflugerville. We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code and have done so proudly since 1996. The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Answers provided are for general discussion only and are not to be considered legal advice and they do not create an attorney-client relationship.
The specific answer to your question is that you cannot be responsible for a dependent's debt.
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