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Student loan default impact on co-signer

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My 80 yr old dad co-signed about $50k of student loans for my niece. She graduated and got a job but says she can't repay. My parents get soc security and have some retirement income from my dad's job. they no way have or will have the money to repay this loan if my niece defaults. What happens?

[COLOR=black]I got a unique question which is a nice twist to what most people have been asking here. I co-signed a student loan (It's a private loan) for my best friend years ago. He makes decent money and pretty much refuses to pay it (big surprise) and I already know I'm 100% as liable as he is. I've been keeping up with minimum payments so it doesn't hurt my credit.[/COLOR]

[COLOR=black]Here's the twist. I typed up a very long document with dozens of supportive documentation about me suing my best friend for the full amount of the loan if he does not pay it with on time payments within a certain time frame. I also got him and myself to sign this in front of a notary. I pretty much just made a promissory note to a promissory note. I already talked to an attorney about this. He said that I did the right thing and this documentation I can provide is a legal binding contract. I am kind of hesitant because he didn't have much knowledge about small claims court and stuff. I realize even if I sue and win I still have to pay off the student loan but do you think I have any chance at this? Thanks. [/COLOR]

Sub: #111 posted on Fri, 01/07/2011 - 08:47

johndoe1917 johndoe1917

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I have claimed bancruptcy and have bad credit. My citibank private student loan is a huge problem. Bankruptcy did not delete my citibank private student loan. I have a co-signer as well and do not want her to get involved. What are my rights? what can i expect? I have payed 9,000 to the dept. and the principle has not gone down. I owe 42,000.

Sub: #112 posted on Thu, 01/27/2011 - 15:45


Do you owe just private loans? Or a mix of private and federal?

Sub: #113 posted on Thu, 01/27/2011 - 15:52

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:(:(I co-sign with my son a student loan. I find out now after five years later he hasn't paid the loan on a regular basis and what was $10,00o is now, $17,000. I'm being called daily concerning this matter for me to pay back the loan which is in default. I don't want to be sued or have a lien on my home. They are asking for a setttlement to be paid in full not making payments. Is it true i can't start making payments I have to pay in full.

Sub: #114 posted on Tue, 02/15/2011 - 19:53


If you have the capability to pay or settle the loan off in full now, it would be in your best interest to do so. Defaulting on the private loan is a nightmare....the monthly pays will be high, with the goal to get this paid off in a short amount of time. On top of that, private lenders do actively sue even when payments are being made. Go for the settlement and minimize the damage already done to your credit.

Sub: #115 posted on Wed, 02/16/2011 - 02:56

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Reading this thread it looks like there is not point to ask a question. Soaplady has only one answer which doesn't really help. What is the point of commenting if you only say one thing? I know that I am legally liable as a cosigner. Most of the people know that anyway. The questions is what can be done to help the cosigner?
Please don't give a useless answer that I am fully liable for a loan. I know that.
Morality is not as issue here. We can definitely dig dipper and ask why do banks give 20,000 dollar loans to someone who makes 30,000 a year and has already owe 40,000 on his credit cards. Is it because the really want to you to go school or they are just thirsty for extra cash?

My advise to everyone here is definitely consult an attorney. The are plenty law firms that will offer FREE legal help. NEVER disregard a summons. You have 20 days to respond if you dont you will have to pay. Also they can only garnish your wages if you have been employed for one year not less. There is a limit on how much they can garnish - about 25%.
And again talk to a layer and never listen to what the load companies are telling you unless they are offering you a 30% settlement. Then take it and consider yourself lucky.
Your credit will be damaged anyway if you already getting phone calls.
The goal here for a cosigner to catch them on their mistake. That is your only option. The law is equal for everyone and they have to follow it the same way as you.

Sub: #116 posted on Sat, 04/16/2011 - 11:49


Sorry you dont like my answers but private student loans are pretty cut and dry. THese are prom note based and both the guarantor and lender get copies from day losing a prom note is rare.Plenty of law offices offering free legal help?? You are dreaming....there are contingency agencies that will take on the cases when there are FDCPA violations but for a cut and dry lawsuit cases when the prom note is present, well no one can fight that....the agreement is black and white.

Why did you cosign without asking these questions first? There are a lot of students who borrow responsibly and pay them back on time. Personally I blame the cosignors who are usually parents....,if they said no, maybe the student would have thought about making better educational choices that didnt require private funding. Sorry, but I wont sugar coat....I saw too many ill prepared students and parents in my office looking to borrow, regardless of the fact degree program they were enrolling in would probably not lead to gainful employment.

Sub: #117 posted on Sat, 04/16/2011 - 13:09

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My husband cosigned a private loan for our son. He has completed school, and refused to pay. We thought we had read at one point if they made payments for a period for tow years, without default, we would be able to remove my husbands name. Is this true, and if so, who would we contact? Our son has an income tax return that he could put down a nice amount, but refuse , says he has to live on it. We are at at loss. Any suggestions.?

Sub: #118 posted on Wed, 04/27/2011 - 07:41


It is the FIRST 24 payments once leaving school that have to be made. If any payments have been missed, the deal is over. I can assume if you dont know who to contact, you dont know who to contact.

Let your son know that both he and his dad will end up being sued if the loan defaults.

Sub: #119 posted on Wed, 04/27/2011 - 15:36

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Just joined this forum and so far no one is addressing suing the actual person who took out the loan. Thanks so much for providing hope when you mentioned you took your niece to court and won. My only question is, you had to pay the full amount before you took her to court? This must have been difficult to sue a family member. My husband is in the same situation and is considering suing a family member.

Sub: #120 posted on Wed, 05/25/2011 - 10:00


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