This is a big problem. Educational loans, as you may be aware, are generally nondischargeable in bankruptcy, except where the debtor can show undue hardship. Bankr. Code
§ 523(a)(8). However, if you cosigned the loan, then your son's bankruptcy is irrelevant, because the lender will simply turn to you for full payment. So, unless you
have an undue hardship that you could exploit in bankruptcy, then you are on the hook for this debt for the rest of your life, unless you pay it off.
Probably the best deal here would be for your son to try to refinance the loan with some other borrowing power, such as a credit card, or better yet, multiple credit cards. Even if the interest was extraordinarily high, assuming that he made good faith payments for about a year, he could then file for bankruptcy and discharge the debt. Meanwhile, you would be off the hook, because you would no longer be a cosigner. And, your son's good faith rationale for paying off the original loan would be to remove you as a cosigner, which is a reasonable purpose.
Hope this helps.
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