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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?




Hi there,


I'm a television news producer, I'd love to touch base with you about this topic, we're doing a story about student loan co-signers.


If you'd like to email me my email is: mary@newspronet.com


Sub: #1 posted on Tue, 12/11/2012 - 11:38

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Settlements once sued are usually not a generous because court and legal fees are applied to your account. That can add an aditional $1500-$2000 to your account.

Even making payment they can still wipe out payments. That is the power of a judgment. Whether or not they can seize a private pension would depend on your state exemptions.

Sub: #2 posted on Tue, 06/07/2011 - 04:07

SOAPLADY SOAPLADY
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(Posts: 17210 | Credits: 4746.28)

Thanks for your help. If they take me and my co-signor to court is it possible to still settle/do a payment plan at that point? If my co-signor receives a pension from a state/local govt can they garnish that? Also are they inclined to empty your bank account if you are willing to do a payment plan?

Sub: #3 posted on Mon, 06/06/2011 - 20:55

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Putting a downpayment on an account will not stop them from suing. Only paying in full or a settlement will.

Why do they sue? To protect themselves. With a judgement, they lien homes, garnish wages (if state law permits it) and empty bank accounts. They show no mercy.

Sub: #4 posted on Mon, 06/06/2011 - 02:34

SOAPLADY SOAPLADY
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Hi again, please ignore my previous two posts, I've been reading up on here and have answered most of my questions, :)

What remains is the question about putting money down to avoid being sued/no money down. In another post you said they sue to protect their interests, which is understandable, but if I put a larger amount down say 5,000-6,000 on a 15,000 loan would they still be inclined to sue? Also if they say they won't sue can I trust that or could they still end up suing?

They offered 10,000 to settle it--do you think they'd be willing to go a little lower? Say 8,000? That amount I/my co-signor could probably scrape together between the both of us.

Sub: #5 posted on Sun, 06/05/2011 - 22:22

Unregistered


Hi another question,

this is a 15,000 loan through citibank, if I can put 2,000 down would they still want to sue? If they plan to sue will they tell you? The woman I talked to told me that I was lucky I called back because they were planning to re-evaluate on monday and I can "stop" it somehow. Do you think she's referring to suing? If I do manage to come to some agreement with them regarding payment plans and suing can I trust them to hold to that? I really wish I could take the 10,000 deal they offered, only 2/3 of the debt and it would be done with. All my other loans are federal. Oy vey.

Sub: #6 posted on Sun, 06/05/2011 - 21:49

Unregistered


Hi I'm the person above. Thanks for your help.

So even if we do a downpayment with a payment plan they will still sue us? Why would they do that if they are getting their money? Also I was paying this loan and got 3 months behind, but was still paying it. There was a whole bunch of confusion on one payment and I ended up going in to default, would this help my cause to not be sued? I had a checkered past with citibank but I was def paying on that loan regularly and on time.

When they go to sue is that the point they can garnish wages? Would they be able to garnish wages of my co-signor as well? I'm not clear what suing enables them to do that they can't do now and what the incentive is for them to sue me if I start making payments? Also could you please answer my question about the damasge to my co-signors credit? I know it will be the same as me but if he already has good credit and many existing loans that are way more than this would it really hurt him as much as somebody like me with no credit history?

Thank you!

Sub: #7 posted on Sun, 06/05/2011 - 21:26

Unregistered


Without cosignor info they do not have to offer a payment plan at all. This is a private loan....they dont care about affordability. And even if you do come to some meeting of minds, they will probably end up suing both of you anyways....that is just the way privates work.

As for suing anyone else, dream on. On every private and federal loan prom note I have seen there is the phrase (or something similiar) "I will not sign this note unless I have read and understand the terms." With a cosignor, this means that two of you have sign under the same statement.

Sub: #8 posted on Sun, 06/05/2011 - 16:23

SOAPLADY SOAPLADY
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SoapLady, Ihave a question about paying back a defaulted private student loan. I've spoken with DCS and I'm trying to get a payment plan together (they are offering one) but they won't give me any numbers that don't involve a downpayment without getting financial information from my co-signor. Is there any way to force them to give me numbers for a payment play that doesn't involve 8,000 down on a 15k loan? I'm unemployed but can do some of the monthly payments they've offered (with downpayment) but I'm not given the option without involving the co signor.

I'd like to say that I've gotten student loans my whole life. This is my very first private loan and I did it after UG and a JD. I blame my fin aid office, they did not explain the difference to me AT ALL. They handed me the loan and said I should pay it back quickly because of the rate. I'd love to see a lawsuit brought for having important terms about repayment and responsibilities buried in the fine print. It would be based on a sound legal theory that's tried and true. In my situation, had I know that they could not be consolidated with fed loans I would never have gotten one. My serious regret is having my father co-sign. He has (or had :( ) excellent credit-how much will it affect his credit? His score is really high and he has two mortgages which he pays on time, pays all his bills on time. I'm hoping he won't be that badly hit. I'm sad but ok with suffering the consequences, just wish he didn't have to.

SoapLady doesn't have the friendliest bedside manner, but she's still assisting you so just take it and appreciate the help.

Sub: #9 posted on Sun, 06/05/2011 - 13:10

Unregistered


Same situation. My husband will be paying for his daughters student loans well into retirement. We wrote her off. She doesn't exist to us! At least we know she will never mooch anothr dollar out of us, and she is struggling! (Which we chalk up as Karma, what comes around..goes around.) We have no choice to pay, fine. Bujt she better NEVER come knocking at our door. Door closed...bolted shut when it comes to her. She's a loser for throwing tha loan, 30,000.00 on my husbands lap. Menace to society I say!

Sub: #10 posted on Wed, 06/01/2011 - 15:40

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