Student loan default impact on co-signer

Unless he is sucessful in consolidating you probably wont be able to get your name off. Consolidations are very difficult to come by for private loans.

Unless you actually cosigned for the subsequent loans, you are NOT liable for them. Argue that will sallie mae.

So, please correct me if I am wrong. I have read this whole thread. If a co-signed loan goes into default, to the point of being sued..both cosigner and borrower will end up paying?

Correct.....both carry the same liablity on the loan.

Even Plus Loans?

Plus Loans are loans taken out by the parent for the student. The student is not a cosignor. PLUS loans are federal loans so they never go away.

I know that they never go away...but as posted earlier..if goes into default to the point of being sued. Is both cosigner and borrower liable?

The borrower is the parent. Is there another cosignor on it?

Federal loans generally dont sue...they utilize administrative wage garnishment which does not require a court order and tax offset/federal payment offset including SSI and DSSI.

Thank you. Could we look into Chapter 13? Looking for options for repayment. We have in forebearance til end of August to give us time to figure things out. We can't afford this loan and don't know what were gonna do for repayment since his daughter refuses to pay.

This is not your daughters loan....she has no liability. This is your loan.

You could to chapter 13 but it is only a temporary stop gap. As soon as the chapter 13 is over, the remainder of the loan becomes due with all accrued and capitalized interest. It will also cause the loan to default.

We'll figure it out. My husbands parents wrote her out of their will and are willing to give us the money she 'would' of got to pay it off. We are considering it. So we have options....Thats the price you pay when your not responsible. We shall see.........

Anonymous Replied on 07-29-2009, 03:09 AM
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Sub: #[URL="http://www.debtconsolidationcare.com/forums/showpost.php?p=454415&postcount=20"]20[/URL] Co-signer for niece but never received any papers?
"My sister asked me to co-sign for my niece to go to school. The original note was for $5K. I agreed but never received any paperwork. She said she did it electronically. Well they are late on payments and I have received a bill that shows the loan was for $8k. I never signed anything, what can I do?"

Soap Lady....I say the above post and didn't see that anyone responded. Is the co-signor above responsible for this loan considering he never signed the promisory note?

You would have had to sign it electronically, not her. Did you give her your SS# to do it? How long have you known she electronically signed for it? Quite frankly, you may have grounds to fight this one if you just found out she signed electronically for you without giving a chance to review the prom note or disclosure.

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Quite possibly. However, it may light a fire under the niece to catch up with the payments, find a second job. Sure a better opinion that possible jail time.

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The amount was probably correct....this being a private loan, it would have been accruing interest since day one.

If the prom note was e-signed without the posters knowledge or express consent, it would be forgery.

A co-signer is held responsible for the repayment. If you are not able to make payments on time the co-signer can be forced to make the payment.The co-signers name also appears along with the debtor in the credit report, and it will affect the co-signers future when he applies for a loan.

Please need your advice:

I read some post, stating that if loans are consolidated with another company, than the co-signer is released from original loans, is this true?

It will be a bit of relief, because my father keeps complaining about constant harresmant he gets everyday by AES and SallieMae. By the way its for private loans, and I don't mind going into default after consolidation, I just want to remove my co-signer from my original loans, so nobody else gets hurt before the default starts...

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If as cosigner I pay off the student loan for a neice who has filed bankruptcy. What are my rights? Can I sue the parents of my neice? Both my neice and sister has signed a promissory note.

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Question for you,

My parents have taken out approx. $50,000 in my name, then put themselves as the cosigner. I did not have any part in this, they used my name, social security number, electronic signature, etc. The loans were for my schooling, however, I was told when I was in high school that my parents would be paying for my college and they wanted me to go to a certain big school that was very high tuition.

Now, 7 years after my high school graduation, I am married, work a fulltime job and a part time job, and am looking to buy a house. My parents have ceased all communication with me 20 months ago, as they were unhappy that I became engaged. I received a letter yesterday from a CA telling me that my loans have defaulted and I am responsible for the money. I have never received any information from any loan, I do not know any loans amount, I do not have any log in information for any loan websites, I had NO IDEA the loans were not being paid. Now, I am held responsible for a debit that I never chose to have, my information was used as a way to send me to school.

What are my rights? What are the expectations for me? What should I do next? I am in no position to pay these loans back, did not take them on willingly, and would not have gone to college (or at least the one I went to) if the oral agreement between me and my parents was for ME to pay. The agreement was that I would go to college and THEY would pay all loans.

Thank you!!

The oral agreement really means nothing. The only way you are going to get out of this is to file a police report for fraud and forgery against your parents. You will need to get a copy of the report and then file it with your lender. If they took loans out without your knowledge, they committed forgery. Harsh reality but this is going to be your only avenue.

I cosigned for a student loan, private, thru AES for 11k . Dumb, yes, even dumber yet, it was for my Girfriend (at the time) little sisters boyfriend (yeah I know... really dumb) Better yet, I live in seattle, he lives and was going to school in Fl (somewhere, yeah I dont even know where) His phone is now turned off, I can find him, He maybe in jail or dead for all i know... they are now talking defaulting the loan... any advice?

Get ready to fork out the cash.....you are legally liable for it...and they will pursue you if they cannot find him.

so....one of my son's loans has gone into default. It was sold to a Guarantee Agency. Can you explain what this is? My son is currently underemployed (waits tables three evenings/week. Maybe earns 300/week in tips) and cannot find any employment. No assets. What happens in this situation? (He wanted to pay what he could, but the loan agency refused to negotiate a longer payment term, forbearance, etc.)

It wasnt sold per se to the guaranty agency...the agency was forced to pay the default claim.

Is this a private or federal loan?

Private loan. It seems like it's almost better to default. We (and my son) tried to work with the people who held the loan AES/Mellon Bank (it was sold to Mellon from Education Finance Partners...who were told would have worked with us....without notification to us) to no avail. So....what happens with a Guaranty Agency? They sent a bill for the entire loan amount (no extra fees or anything) or "call to set up a plan that will work for you". My son has yet to call as he is barely paying the rent. I think he should call anyway.

Also....as far as wage garnishment. My son lives in Florida. Isn't there a head of household exemption? This is a private, not a federal loan.

We are cosigners on a very large loan of his. Unexpected medical bills (my younger son has had to have major surgery three times in the past 4 years) and loss of my husband's job has taken it's toll and we are also unable to pay the 450/mo payment. Our attorney (we recently filed bankruptcy) told us NH state law makes it almost impossible to garnish wages on private student loans. We have no assets, either. I suppose they could put a lien on our house, but we aren't planning on selling it and it's currently worth about what we owe on it or less. We are happy to pay something, just can't pay 450/month.

It is most definately NOT better to let a private loan default. Once he defaults, the entire balance becomes due in full. Even if he gets set up on payments, they will sue.....this is how private loans operate.

He only working 3 nights? Cant he find another part time job???

I guess I'm wondering what they can get if they sue? No assets at all and at this point probably no tax refund either. And if he is head of household in FL and can't be garnished then what happens? Who brings the suit - the guaranty agency? The reason I felt that it seems better to default is because his credit is already in ruins and at least the guaranty agency said they would work with him whereas the lender would not. If you are set up with payments, why do they still sue?

There may be no assets today. They looking to the future....future earnings, future assets.

The guarantey agency will sue even if payments are being made. Why? Because it protects their interests.

I don't understand what the suit is for, though. Do you just keep making payments and the judgement goes into effect if you miss a payment? I guess if my son knew this, he would just make sure everything (assets, accounts, etc.) were not in his name. As far as earnings, that's another matter. But, if he was earning money, he would pay on his own. You just can't pay if you don't have it. Right now it is a choice between being evicted or paying a bill. If he is evicted, he will lose his job as well.

And, again, isn't there a head of household exemption against garnishment in FL and isn't NH a state in which garnishment is extremely difficult? (Private loans).

I would call 866-833-6398 they could get you a good deal and they don't charge a fee until the settlement is done.

Please can some help me? I started a thread under Silly Aries. You guys I NEED help BAD! PLEASE read my thread and offer any advice you may have. Its a matter of survival at this point.

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I'm cosigned on a fed student loan. The payer missed a few payments, which showed up as a 60 days past due black mark on my otherwise sterling credit. While the loan is now deferred, the credit harm is done and still on my record and affecting my ability to get a mortgage.

Can anyone recommend a means to clear that up? I assume fed agencies are not especially motivated to help clear this up. I'm actually open to sucking it up and just paying off the whole loan, if that would help. But since I'm not sure it would, I am holding on to that money for now...

Best wishes,
C

Federal loans havent required cosignors for aboiut 20 years. Only the federal PLUS loan may require it. You sure it isnt a private loan?

Could be a PLUS, not sure -- it was graduate level and only a few years old. My credit report lists 'US Dept. of Ed.' as the creditor so I thought of it as federal. I can dig up the details if needed.

You wont be able to clear it up....if it was reporting correctly, the DOE wont remove it.

It was reported correctly -- I trusted the borrower that they were clearing it up, but they apparently did not do so until too late. I should have understood the gravity of it all better, I've just never had credit problems so I was naive about the risks.

So in that case neither paying it off nor talking to CRAs can change things? That is very unfortunate. Thank you for the information.

So, reading the above questions and answers, looks like I am in a very similar situation. I have cosigned for my mother and stepfather who have rarely made payments on their federal student loan. It has destroyed my credit and I wish to get rid of it soon. Is it true the only option is court? What is the limmit for small claims? It is about 10 thousand right now.

Ok....what type of loan did you cosign on? The only federal loan which requires a cosignor is a PLUS loan.

Court is not an option. If you cosigned by your own free will, you took on that liablity as your own. You wont have any luck in court.

I took out private loans and they say that they are cosigned by my son. I am now disabled and living on social security. My son is now out of school and not making enought money to cover this loan too. I have been going round and round with SallieMae asking for help with this situation. They will not work with me at all. I have no assets. I already had to file bankruptcy and have read on the internet about undue hardship reguarding student loans. I only get 807.00 a month and they want 613.00 a month. I need to live. Do you know of anything I can do?

As with all private loans, Sallie Mae is under no obligation to assist or lower payments....this is just how private student loans work. If allowed to default, they will end up suing the both of you.

I co-signed a $13,300 private student loan with my son. The balance is now $12,150. He refuses to pay. I am on Social security and pvivate pension. Can my income be garnished? San I sue hiim?

I cosigned a pvt student loan with my son for $13,300. He refuses to pay back. I am on Social Security and some pension. Can AES garnish my income? Can I sue him? Would the bank leave me alone if I leave the country?

They will endd up suing both of you. Your social security is exempt but your pension funds are not. Does he understand if they get a judgemnet they will garnish his wages?

When me and my husband were married I cosigned on a student loan for him. We are now divorced and I have been paying on the loan and he hasn't. Can I turn around and sue him for the amount of the loan after the loan is payed off?