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I cosigned student loans for someone ...

Discussion in 'The Shit List' started by sinewave, Feb 19, 2008.

  1. sinewave

    sinewave Senior Member Premium Member

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    I cosigned some commercial student loans for someone back in 2001 because I very much wished to see this individual succeed. "This individual" is a relative with whom I am not very close and have never known very well, but I felt that she deserved some help with her university tuition since her parents were basically deadbeats at the time.

    Over the past 2 years her payments have become increasingly late, such that her bank is continually calling me now and my credit rating is being impacted.

    I just got off the phone from someone at her bank ... again. I'm getting sick of these calls.

    She and her husband seem to be spending most of their time securing investment money for a new business they're launching.

    I've cosigned more loans and credit cards over the past 20 years than I can recall, but I've never had any of these people compromise my own credit rating in return.

    Any advice? I know I can't "divorce" myself from the loan now, since she's so consistently delinquent on her payments they want to hold on to me.

    Best,
    Sine
     
  2. drd26

    drd26 Junior Member

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    Is it possible to refinance the loan with them? This could possibly get the loan amount into a monthly range where they're able to stay up with the payments. I'm certain you don't want to even think about signing another loan with them, but if it will help protect your credit it may be worth it.
     
  3. Uptownbulker

    Uptownbulker BANNED BANNED

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    You need to contact an attorney pronto to get an action filed against the deadbeats so that YOU can recover the funds as the bank is not going to go away. You do have rights in this matter but you will have to speak with a lawyer to determine what those rights may be in the state in which you live so I can't give you a referral.

    Suffice it to say that there are ways to tie them up such that either you or the bank get paid and at this point, we don't care which as if you get paid, you can make the payments.

    This is one of the reasons that you use Legalman.........................

    ...........to get your money!

    Good luck!

    Uptown.
     
  4. sinewave

    sinewave Senior Member Premium Member

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    If the payments had been timely, I could have had her refinance her own loan in her own name without me. But it's too late for that since she hasn't sufficient credit rating now to qualify.

    This is a good lesson for me though. There remain some loans in effect for which I am the cosigner for others. I think I'll contact them all to get them to refinance without my help, since all the rest of them are responsible in making their payments and should be able to do so.

    Thanks for the feedback.
     
  5. sinewave

    sinewave Senior Member Premium Member

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    I was hoping you might pitch in your .02
    in fact, I was practically laying bait for your response:)

    I'll start looking for a suitable attorney first thing tomorrow. I am just so disappointed in this person, I don't want to believe what I am seeing so I was delaying the inevitable.

    Thanks, everyone, for listening to my whining.

    Best,
    Sine
     
  6. HaRRo

    HaRRo Elite Member

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    If nobody witnessed you signed id pursue claming it was forgery, just depends if there was witnesses, i.e lawyer who watched you sign it. If nobody did just let on it wasnt you. That should fuck them all up :D
     
  7. sinewave

    sinewave Senior Member Premium Member

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    Lying to Citibank would not only require more creativity than I am willing to put forth, but would likely cause me more trouble than I am willing to bear.

    Since they hold the loan with me as cosigner holding the bag, they can easily demand payment of the outstanding balance in full. Not a situation I'd like to provoke.

    Thanks for your feedback though.
    Sine
     
  8. sinewave

    sinewave Senior Member Premium Member

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    I'm thinking of speaking with her bank again to see if liens can be placed against the investment capital she and her husband have gotten for their new business venture.

    Probably a bit of a stretch, but I'm feeling really bitchy about this.

    Thanks again for the responses.
    Sine
     
  9. nicho

    nicho Regular Member

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    Hi sine, You don;t need me or anyone to tell you that the law regarding credit differs slightly from country to country but the principles remain the same.

    I don't know if it would work in the usa but in the UK you can take a garnashee order against the persons bank account which in effect freezes their account until your debt is paid....it has the effect of crippling their bank account and any other debters will only get paid if yours is cleared first.

    You should also apply to experian to have an update of your credt report to see if this loan is tied into your name as well as the person you co signed the loan for, if it is you can apply free of charge for a notice to be put into your credit file for dis-association from that other person so it does not affect your present and future credit.

    Hope that helps you
     
  10. Uptownbulker

    Uptownbulker BANNED BANNED

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    I used a favour owed to me by one of the dreaded species of Legalman this morn and did come up with a couple of thoughts.

    First, since the note is not yet in default, you most likely have no course of action against the reprobates.

    Secondly, he did suggest that you contact the bank and make certain that you receive mailed notices as well as the phone calls so that you always know what is going on. As co-signer, this is your right under the law.

    Thirdly, he suggested that you simply pay the loan one or two months in advance to keep things quiet but he also suggested that you would need to make arrangements with the bank to do this such that the advance payments are not merely applied to principal and not to advance payments. Expensive for you but it could keep the loan out of default as the condition of the loan will affect your credit rating and there is NO way that you can get rid of it doing that.

    On a whim, I also called Vinnie The Pug over on Independence Avenue who only wanted to know if they had credit life insurance on the note!

    Not a recommended course of action, I think!:eek:

    LOL!;)

    Best wishes!

    Uptown.
     
  11. sinewave

    sinewave Senior Member Premium Member

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    Thanks Nicho & Uptown! Good information to have.

    I'll check with Experion, but I'd bet I can't disassociate myself in the US.

    I really appreciate the feedback.

    Best,
    Sine
     
  12. clopper

    clopper Regular Member

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    I'd agree with a few other posters in regards to keeping up with the payments, just because your own credit is at stake. As far as my .02, if her capital is at the same bank that holds the paper most banks will automatically deduct payments. As far as garnishments and freezing accounts, too soon, the debt would have to be written off and a judgement won in court for them to levy, lein or garnish anything. You could sue for breach of agreement and threaten her and her husband depending on the state he could be in the mix just for saying I do, that alone may hasten things... I'd get a lawyer at this point before you find you have no money because they sued you unknowingly and levied your account...
     
  13. CapMorgan

    CapMorgan Junior Member

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    First off the info I am giving is based on the US laws. Even though I am not an attorney I will offer some advice.

    The companies point of view - which I am sure you understand or understand at least now. The co-signing of the loan was needed because the person getting the loan did not qualify for the loan on their own. When you co-sign for a loan you are not saying saying yes I trust this person, or even yes I will help them out, or even that you will pay half if you have too. Your signature means that your credit will be effected exactly like the other person on the loan. It also means that if they do not pay, and the company has to pursue a judgment, garnishment, or lein on someones home this can happen to you. They will usually go after everyone involved. So if your friend decides to run, and has no assets, vehicles, job, or home, then they may secure their money with what you have. This is really what a co-signer is for. From experience I can tell you co-signers are perfect for this need.

    Best Option - Get out of the loan (As stated Before). This will need to be done as stated before by a refinance of the loan under their name only. I am sure this depends on the balance and as you said their current credit standing. I would first call the company and try and see if you can work out a better payoff. Specially if the loan is more then 90 days past due they may be more apt to do this. Do not act like you have money when you do this. See if they will also agree to waive the past dues if you are able to settle the balance in a lump sum. If they agree to this, make sure you get it in writing. If your friend really cannot pay this new balance off in a lump sum and you have to help out make sure you keep your self separet from any new loans with your friend. Remember that you do not have to get the money from place. Maybe have your friend get a cash advance from one place. Put some on a credit card. You put in a small portion from what you can afford to lose. You get the picture.

    Do not
    Waste your time disputing the debt - They have the contract, and that is all they need.
    Do not pay any more payments on this loan without having a plan of attack on how you are going to get out of this. Nothing personal against who you cosigned for, but as long as you keep paying they will worry less and less about what will happen if they cannot afford to pay in the future. You will continue to be the one that gets the calls, the headaches, and spends the money.

    Be carefull about spending more time, headache, and money going through an attorney to deal with this unless it is your very last option. From what I have read you were not married to this person, and unless you plan on lying and saying that you were not in a sound state of mind during the signing (Doctors reports needed) then there is not much you can do other then trying to convince your friend with no money to voluntarily pay you back. You should be able to do this without an attorney. Contractially it was clear that the loan was going to be paid by both of you.

    Hope this help.
     
  14. sinewave

    sinewave Senior Member Premium Member

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    Thanks Clopper & CapMorgan.

    I'm prepared to take over the loan if need be, since I agreed to do so at the onset of the arrangement.

    I'm just pissy that someone could be so ungrateful and inconsiderate. But that does in no way cloud my judgment in terms of the original agreement that I signed and remains in effect.

    For example, I'm not prepared to lie--as was previously suggested--and expose myself to prosecution by one of the largest banks in the world. I just want to find a way to accelerate resolution legitimately.

    But I'm prepared to lean on her to refinance with a different cosigner, but failing results in so doing, I know what's required of me.

    Thanks to everyone for your help. I really appreciate it.

    Best,
    Sine
     
  15. tonlilaz

    tonlilaz Executive VIP Premium Member

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    shit, that's totally insane,....

    it's cool you wanted to help this person out, but when it comes to loans and money, you gotta cover your tail

    i'd never cosign on a loan for anybody...especially with what's been going on w/pple folding on home loans

    bad bad situation
     
  16. designer

    designer Junior Member

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    I am not so sure that work ...! LOL

    But I would give points for creativity.
     
  17. GoldenTiger

    GoldenTiger Junior Member

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    Its never a good idea to cosign a loan for anyone. Too many problems are caused by this.
    And besides, who needs school anyways. School is boring. Why would anyone pay 5k just to watch some dude read from the book in front of the class? You can learn a LOT more on BHW! :)
     
  18. Zeprokon

    Zeprokon Newbie

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    I would certainly hope that my doctor did more that read the BHW Forum, and listen to some guy read out of a textbook in class.

    Zeprokon