If the loan company is willing to release him as a co-signer, that is great. However, if he has a judgment against you, that will not get rid of the judgment. There are facts that are unclear in your question, so this makes it difficult to try to answer your question. Your question seems to suggest that the judgment is related to the student loan. Is that correct? Did he sue you because the student loan company pursued him? As a practical matter, if he decided to sue you because of his liability from the loan, and he got a judgment, what will make him willing to get his name off of the student loan at this point? It would seem that he would have sued because he had incurred a debt as a result of the loan (in other words, the loan company sued him). If true, simply transferring the loan fully to you at this point may not cause the result you are looking for. It is unclear at this point though without more facts. I would strongly suggest that you consult with a consumer debt or bankruptcy lawyer in Tucson. Although the student loans may not be dischargeable in bankruptcy, the father's judgement may be dischargeable. You should contact a qualified consumer debt attorney ASAP. Good luck!
I am not sure you fully understand your situation. I know I don't fully understand your situation.
With that being said, you cannot double collect on a debt. So if he has a judgment for money you have refinanced, this should be told to the court to minimize the amount of the judgment.
Here is the situation I am concerned about: If you father had to pay $1,000 you will still owe him $1,000 (at a minimum) because if you refinance the note, this amount will not include the amounts he paid.
You need to talk to an attorney.
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If you live in Arizona, please contact me for actual advice; this is just speculation. It certainly is not legal advice. I don't have enough information to give actual legal advice. I can only take the limited information presented and provide a idea of what you might do and how it may turn out.