When Francisco Reynoso’s son was killed in a car accident, the California gardener was left buried in grief — and in his son’s student debt.

Reynoso had co-signed for six figures in student loans so that his son, Freddy Reynoso could attend college. The elder Reynoso made just $21,000, according to his 2011 tax returns.

Numerous Debt Collectors

He was harassed by numerous debt collectors, even though his son’s federal student loan was forgiven upon his death, because the bulk of the loans were privately held.

Freddy Reynoso’s student loans broke down into two main parts: Bank of America and First Marblehead. The BofA loan changed hands – ultimately being sold to investors through another company that neither Reynoso had ever heard of.

Bankruptcy Process Discharge

The Marblehead portion of Reynoso’s debt has now been discharged through the bankruptcy process. The company decided not to dispute the discharge attempt.

But the BofA portion of Reynoso’s debt took a strange path. It was originated by a company that later was accused of paying schools to steer students toward its loans products. The loan passed through Swiss bank UBS, landing in a portfolio of assets that were acquired by the Swiss central bank to stabilize UBS during the financial crisis.

That fund, known as the StabFund, reached a settlement with Reynoso’s attorney, Erik Clark. It’s unknown whether the settlement will still require Reynoso to pay on his debts. There is a confidentiality agreement that binds anyone involved from speaking about it.

Speaking generally Clark said: “From an attorney’s perspective, when you try to settle or negotiate, the real problem is figuring out who you’re supposed to be talking to. If someone is calling the client and harassing them, you’re not sure that’s who you’re supposed to deal with.” This is partly because the holder of the loan often contracts with third-party servicers or debt collectors. Clark says sometimes such companies won’t divulge who actually holds the debt.

“What I tell people — almost everyone who comes to me — is this is going to require a political solution,” said Clark. “People in this situation should be getting politically active and talking about this issue to congressmen. Someone has to be ringing the fire bell.”

Still Hazy Future

Reynoso’s financial future remains hazy. One of his debts has been discharged, but he’s unsure about what’s happened with the rest because the final paperwork remains to be signed. Reynoso replied that he still didn’t know if he will end up having to pay in the end.