College debt looms for student with Klinefelter syndrome; credit card debt ...

Category: Auto Financing Published: Tuesday, 18 November 2014 Written by test

He will need a doctor to certify that his disability prevents him from obtaining gainful employment, Kantrowitz said. He will also need to earn less than the poverty line annually for the three-year post-discharge monitoring period.

Kantrowitz has more information about such discharges on his site.

Another option is to consult an attorney, Kantrowitz said. If he lacked the mental capacity to enter into a contract, he might be able to repudiate the loans, Kantrowitz said.

Your nephew also may be able to discharge the loans in bankruptcy, Kantrowitz said. Typically student loans cant be erased this way, but there are exceptions, including one woman in Maryland who was able to erase $340,000 in law school and other education debt after a judge said her Aspergers syndrome made it impossible for her to hold a job.

The odds of success are low, but many of the successful discharges involved disabilities, especially when the loan program did not provide for a disability discharge, Kantrowitz said.

A final possibility, if your nephew has federal student loans, is to sign up for an income-based repayment program. If his adjusted gross income is less than 150% of the poverty line, his required payment would be zero and he would be eligible for the discharge of his debt after 25 years.

Dear Liz: Youve answered a number of questions regarding credit card debt when a person dies. But I havent quite seen the answer I need. If a spouse dies, and the remaining spouse is not on the credit card account, is it still the responsibility of the survivor to pay the card? Does the answer vary by state? Or is it a federal law?

Answer: As you read in previous columns, the dead persons assets are typically used to pay his or her debts. If there arent enough available assets to pay the creditors, those creditors may be able to go after the spouse in certain states and certain circumstances.

In community property states such as California, debts incurred during a marriage are typically considered to be owed by both parties. Other community property states include Arizona, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. In the rest of the states, a spouses debts are his or her own, unless the debt was incurred for family necessities or the spouse co-signed or otherwise accepted liability.

Collection agencies have been known to contact spouses, children and other family members and tell them they have a legal or moral obligation to pay the dead persons debts, regardless of state law. If you are married to someone with significant debt, contact an attorney to help you understand and perhaps mitigate your risk.

--Liz Weston

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