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Parental liability as co-signers on kids’ school loans subject to divorce decree

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Student loan liabilities of parents who co-signed for their two children should have been a consideration in dividing property in a divorce proceeding, the Indiana Court of Appeals ruled Thursday.

The panel affirmed in other respects the ruling from the court of Marion Superior Judge David Dreyer, but remanded John Luttrell v. Melinda Luttrell, 49A02-1301-DR-85, to consider the student loans.

“While there is little relevant Indiana case law regarding disposition of contingent liability in divorce proceedings, we believe the loans should have been considered by the trial court,” Chief Judge Margret Robb wrote for the panel that included Judges James Kirsch and Patricia Riley.

The court cited In re Marriage of Lay, 512 N.E.2d 1120, 1123-24 (Ind. Ct. App. 1987) that established the court may not divide assets or liabilities that don’t exist, but said that should not be the case for liabilities in which the parents have guaranteed payment in the event of a default.

“While it is possible that neither John nor Melinda will be called upon to make good on their promise to repay the loans, at the same time, their names cannot be removed from the loans,” Robb wrote. “If one of the children defaults, the co-signers will be liable on the debt. We remand to the trial court for consideration of the Luttrells’ liability under the children’s student loans.”


 

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  1. For many years this young man was "family" being my cousin's son. Then he decided to ignore my existence and that of my daughter who was very hurt by his actions after growing up admiring, Jason. Glad he is doing well, as for his opinion, if you care so much you wouldn't ignore the feelings of those who cared so much about you for years, Jason.

  2. Good riddance to this dangerous activist judge

  3. What is the one thing the Hoosier legal status quo hates more than a whistleblower? A lawyer whistleblower taking on the system man to man. That must never be rewarded, must always, always, always be punished, lest the whole rotten tree be felled.

  4. I want to post this to keep this tread alive and hope more of David's former clients might come forward. In my case, this coward of a man represented me from June 2014 for a couple of months before I fired him. I knew something was wrong when he blatantly lied about what he had advised me in my contentious and unfortunate divorce trial. His impact on the proceedings cast a very long shadow and continues to impact me after a lengthy 19 month divorce. I would join a class action suit.

  5. The dispute in LB Indiana regarding lake front property rights is typical of most beach communities along our Great Lakes. Simply put, communication to non owners when visiting the lakefront would be beneficial. The Great Lakes are designated navigational waters (including shorelines). The high-water mark signifies the area one is able to navigate. This means you can walk, run, skip, etc. along the shores. You can't however loiter, camp, sunbath in front of someones property. Informational signs may be helpful to owners and visitors. Our Great Lakes are a treasure that should be enjoyed by all. PS We should all be concerned that the Long Beach, Indiana community is on septic systems.

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