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Coll. agency won't accept my money for my student loan. Going to legally threaten my cosigner. What can I do?

San Diego, CA |

I have a student loan approx 20K. Haven't found a decent job since I left school. I'm now waitressing @ a South of the Border restaurant. Ends don't meet. I have defaulted on my student loan and they now want to go after my co-signer. To prevent this, I offered to pay $25-35 / mo., but they won't accept any money from me outside of $14000. I was told they know I don't have it, but they know they can get it from my co-signer. They may get payments, but not $14000 lump sum. They now want a 3-way with my co-signer. I dread this and don't want it. What can I do?

Attorney Answers 4


If it is a government insured student loan, you may wish to see if there are any programs available to assist you due to your reduced income & financial circumstances. I am posting a link to the info site below.

If you have a private student loan or cannot make a deal on the federal student loan, you may wish to consider whether you could manage repayment of the debt better through a chapter 13 bankruptcy program.

Hope this perspective helps!

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Government loans you should go on the income contingent plans that they offer. Likely this loan is private and they can go after the co-signer if the loan is in default. You could file a Chapter 13 and it will protect the co-signer as long as they don't modify the automatic stay to go after the co-signer which I have never seen in 8 years of bankruptcy practice.

The response given is not intended to create, nor does it create an ongoing duty to respond to questions. The response does not form an attorney-client relationship, nor is it intended to be anything other than the educated opinion of the author. It should not be relied upon as legal advice. The response given is based upon the limited facts provided by the person asking the question. To the extent additional or different facts exist, the response might possibly change. Attorney is licensed to practice law only in the State of Illinois. Responses are answers to general legal questions and the receiver of such question should consult a local attorney for specific answers to questions.

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They can do that. Co-signing means "I agree to pay the loan". Your offer is practical, but legally does not prevent them from going after your co-signer. As others point out, there are several programs which it sounds like you should investigate to reduce payments/work-out the loan payment default. Best of luck to you. And, you should speak with your co-signer before they do, so you and the co-signer are on the same page. There is no law mandating a 3-way conversation; you and the co-signer need to discuss and agree what to do. A 1/2 minute consultation with a local lawyer might shed more light on your options, rights, and strategies.

This is general legal information, not intended to apply to your specific case. And I may not be licensed to practice in your particular state. Under Federal Law, I am a debt relief agent.

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Hi, it sounds to me like they may have violated some of your rights under the Fair Debt Collection Practices Act, and California's Rosenthal Fair Debt Collection Practices Act. You have a right to dispute the alleged debt, which I believe they possibly may have overshadowed. Please feel free to give my office a call as soon as possible next week and I can try to put you in touch with a local attorney in your state who hopefully, as many do, would take your case on contingency. I think that they are being completely unreasonable with your good faith efforts to resolve the situation.

Please do not take my answer to be legal advice that would establish any attorney-client relationship. Please take it as a general response from my own experience in response to your question. I hope you find it helpful.

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