Author Topic: Wife cosigned student loan for ex boyfriend- He stopped paying- Need help  (Read 6419 times)

essjay43

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I know she should have never co-signed. She feels terrible about it. We're having our second child now and a quick signature from 8 years ago is still haunting us.

I haven't been able to get consistent advice on the internet. Some say we're screwed (8k kinda screwed) while others say you can sue.

I definitely don't want this to hurt our credit or lead to garnishment.

Any ideas?
« Last Edit: December 18, 2013, 09:01:35 AM by essjay43 »

nedwin

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Re: Wife cosigned student loan for ex- He stopped paying- Need help
« Reply #1 on: December 18, 2013, 08:58:59 AM »
I think it depends what your wife's separation agreement or final court decree says about debts.  Her ex probably agreed or was ordered to assume that debt.  Usually the party that assumes a debt through divorce agrees to hold the other party harmless with regard to that debt.  That means that they promise to pay the debt such that the creditor will not pursue the ex-spouse for the debt.  If they don't pay the debt, that action can be a violation of the separation agreement or final court decree.  Usually when this happens the other spouse can pursue contempt citation through the divorce court, or ask to modify the separation agreement to re-allocate marital property to compensate for the violation, or both.  My advice is that your wife discuss her options with the attorney that represented her in the divorce.  If she was not represented, she should speak with a family-law attorney to figure out her options.

essjay43

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Re: Wife cosigned student loan for ex- He stopped paying- Need help
« Reply #2 on: December 18, 2013, 09:01:05 AM »
I should have clarified that it was an ex boyfriend not an ex husband. Sorry about that. Will modify original post.

nedwin

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Re: Wife cosigned student loan for ex boyfriend- He stopped paying- Need help
« Reply #3 on: December 18, 2013, 09:11:38 AM »
In that case her only recourse would probably be to sue him for damages or declare bankruptcy.  but I'm not sure that a co-signed student loan debt can be discharged in bankruptcy.  Once again best advice is to speak with an attorney.  One thing to consider, if she sues and wins, will she be able to collect on a judgment?  Does the ex-boyfriend have any assets?  Or is he dead broke?

MgoSam

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Re: Wife cosigned student loan for ex boyfriend- He stopped paying- Need help
« Reply #4 on: December 18, 2013, 09:23:44 AM »
I don't know what recourse you have with the exception of going after him. That said, he might not have any assets. Another issue is that student loans aren't discharged through bankruptcy, but if you win judgment against him, he might be able to discharge that obligation by declaring bankruptcy, leaving you and your wife holding the bag.


Besides going after him, another option would be to try to talk to the loan issuer to see if you can get a modification. No guarantee, but it might lead to some changes that can be beneficial.

Do you know if anyone else signed the loan? Was there any other agreements made during that time period, and both before and after?

Guizmo

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Re: Wife cosigned student loan for ex boyfriend- He stopped paying- Need help
« Reply #5 on: December 18, 2013, 09:43:45 AM »
I believe my friend that you are SOL. But contact a lawyer, because I don't know nothing bout no laws.

Catbert

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Re: Wife cosigned student loan for ex boyfriend- He stopped paying- Need help
« Reply #6 on: December 18, 2013, 10:11:12 AM »
Yep, SOL.  If  he doesn't pay then they will come after her (as I guess they have).  If she doesn't pay then her credit will be ruined just as if the debt was originally hers.  She could try suing the ex in small claims court (or on Judge Judy) to get back the 8K or whatever your small claims limit is.  But then she still has to try and collect from him.


Frankies Girl

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Re: Wife cosigned student loan for ex boyfriend- He stopped paying- Need help
« Reply #7 on: December 18, 2013, 11:12:36 AM »
Last time I looked (and it was many years ago) maximum judgement allowed in small claims was $5K, so going that route (no lawyer, self file and represent) would still leave OP on the hook for around $3K.

Has she tried calling this ex and telling him that she has small children and can't afford to pay his bill for him and that he is going to ruin her credit as well? He may be one of those head-up-his-ass types that doesn't really think about the consequences and how they will effect others.

I would actually contact him (your wife should), and explain that if he defaults on that loan and leaves her holding the bag, that she will sue him for the full amount and then he will have his paychecks garnished AND ruined credit... but that there would be no choice for you in this matter if he does default on the loan.

But I definitely think ya'll need to contact a lawyer for a consult to see exactly what your options are and how much this can cost you. You should not be relying on information from random people on the internet for legal advice.

essjay43

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Re: Wife cosigned student loan for ex boyfriend- He stopped paying- Need help
« Reply #8 on: December 18, 2013, 01:05:09 PM »
I just don't want to pay a grand to be told I'm SOL.

Just gonna drop some f bombs and hope it works itself out.

$200k

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Re: Wife cosigned student loan for ex boyfriend- He stopped paying- Need help
« Reply #9 on: December 18, 2013, 01:14:22 PM »
If your wife co-signed the loan, she is joint and severally liable for the amount owed.  That means they can collect/sue/enforce the debt against the ex, or your wife individually, or both at the same time.  It is the creditor's decision to make.  Right now I assume it is more convenient for the creditor to collect against her, rather than the ex. 

So, what options do you have if the ex fails to pay?

1) Pay the monthly amounts to avoid action by the creditor, and to keep your wife's credit intact.  This also has the benefit of keeping interest, penalties at a minimum.  At the same time, you must hound the ex to pay the bills.

2) Cut your losses.  Pay the full amount owed to the creditor.  Sue the ex in small claims for the maximum amount allowed.  Collect the judgment against the ex if he has any assets.  Sell the judgment to someone otherwise.

3) Negotiate.  As someone mentioned above, call the creditor and negotiate the amount, then pay it.  (This might not work because you would need approval from the ex.)  Then follow 2) to recover the amount.

Also, if the creditor has to sue your wife or the ex to recover the amount owed, you will probably be on the hook for their attorneys' fees.  That amount is probably another $1,000 - 2,000.  Don't let it get to that stage.
 

dragoncar

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Re: Wife cosigned student loan for ex boyfriend- He stopped paying- Need help
« Reply #10 on: December 18, 2013, 01:20:20 PM »
Yeah for 8k I wouldn't hire an attorney.  I agree with trying to negotiate.  Anyone know if the bank has to "produce the note" like for mortgages?  Ie prove she actually agreed to pay.

essjay43

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Re: Wife cosigned student loan for ex boyfriend- He stopped paying- Need help
« Reply #11 on: December 18, 2013, 01:31:04 PM »
I wish I could just give Sallie Mae like 2k to remove her name from the loan. They could continue to stalk the scumbag for the full amount.


fodder69

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Re: Wife cosigned student loan for ex boyfriend- He stopped paying- Need help
« Reply #12 on: December 18, 2013, 02:17:18 PM »
Has your wife contacted Sallie Mae to see what options she might have? What does the ex say about all this?