Student loan cosigner

Hi,
I was the cosigner of a student loan,Now if my friend(so called)does not repay the loan regularly.it will affect me as cosigner.
What should I do?

1.Should I pay the installment in every month to keep my credit history unaffected?If so how should i approach to get back from her?
2.By doing that I have to sue her every year to get back the amount i pay from my pocket or there will be a permanent settlement by court?

3.How should i proceed?by a collection agent or court?

Defaulting on a student loan is one of the most serious offenses credit wise that you can make. I would pay the monthly payments for two reasons--first of all, you are required to since you agreed to pay them if she does not. Secondly, doing so will protect your credit from this serious offense. I am assuming her student loans are private, and not from the government?

First of all , a collection agency really has no legal authority. Nix that.

I would send her a registered letter ( sounds silly, especially if you see one another regularly or live in close proximity to one another) and tell her she is in default ( if she is ) and that you want her to pay and give her thirty days to respond in writing regarding her intentions. At that point, if she does not respond, I would take her to small claims (you don't state how much the loans are for, so perhaps the amount is too high for small claims court) and sue for the entire amount. You cannot ask the court to rule on separate causes of action pertaining to repayment of the same debt ( i.e. sue every year for payment of the same ).

Here is where the problem comes in----Example: I cosigned for a friend to buy a Corvette---we are Vette enthusiast and I was, quite frankly, tired of him driving one of my three. So, I helped him get his own. I only did so, though, after WE had a separate agreement that he signed stating that if he defaulted, I would take possession of the vehicle since his defaulting would make me responsible for his $800 a month payment. I also put MY name on the title. However, if he stops paying, the bank doesn't really care--MY name is on there. The point I am making is, the BANK doesn't care if he pays or if I pay---we are the same a cosigners. Another side note---I only agreed to do this for this gentleman because 1. I knew him and his character personally for most of his life and 2. I knew he was going to be in possession of a large settlement shortly and I stipulated that his loan would be paid off when he received the same. It was a seamless transaction---but we had a 'side' agreement that helped protect MY interest in the event he DID, for whatever reason, default. As expected, he held precisely to the terms of the agreement and everything was as anticipated, with his paying off the car, and my signing off the title . It was a win, win all the way around.

The point I am making is that in the eyes of the bank, YOU and she are the same when it comes to responsibility of repayment of the debt. This means that you will have to prove to the court that your intention was for HER to pay it and not YOU pay it FOR her.

You could petition the court to instruct her to get her own loan and pay the one off with your name on it--but yanno, you cannot get blood from a turnip. The "fatal mistake" was your putting your name on there for her in the first place. There may not be too much you can do, even from a recovery standpoint until the debt is paid in full.

This means that hypothetically, if you go to court, the judge orders her to pay, and repay you for the amount you already paid--what is to make her comply with the court order? My point is, while it is morally the right thing for her to do to pay her debt, forcing her to do so when you legally became a co signer will be difficult--- unless she procures her own loan to pay off the one with your name on it---something I suspect she isn't able to do from a credit wise standpoint.

You may be in the lurch for the duration of the loan. THEN when the debt is satisfied, I would sue for the entire amount plus damages. But NOTIFY HER in writing now so when the debt is paid off and you sue, she doesn't say "I didnt know he wanted me to pay---he just picked up the tab cuz he is such a good friend, yada yada".

Good luck----and STOP CO SIGNING!! There is a REASON banks aren't taking chances with people like this--and neither should you.

Thank you very much for your ellaborate discussion.But i wonder how could i track her if she leaves her aprtment without intimating...
is there any way i can track her?

Thank you very much for your ellaborate discussion.But i wonder how could i track her if she leaves her aprtment without intimating...
is there any way i can track her?

If you want to be charged with stalking, go for it.

Why would you want to follow her and what does that have to do with her paying you back?

Be advised, if you want the court to have sympathy for you, DON'T screw it up by doing something stupid. In other words don't feel entitled to follow her or stalk her (wrong!) because SHE has done wrong ( defaulted--wrong). In a court room two wrongs do not make a right.

Why do you want to follow her? Another note---defaulting on a loan is not criminal. Stalking is. Don't do it.

Thank you very much for your advice.may i get one more important advice plz.

According to the calculation the banks says 85 doller pm should be the payment and there is 175 instalments.
So I will pay (as a cosigner)with the same agreement or it would be different from the borrowers agreement.I am reluctant to ask these to the bank because i don't want the bank should know that i am a cosigner who is anxious for the borrowers attitude.
thank you very much

You're bound by the terms of the contract you originally cosigned for unless you approach the creditor and have it refinanced into your own name, in my opinion. If you're concerned that the other party won't repay as agreed, you can also approach the creditor and ask to do the same. The only way to adequately assure that account is being paid on time is to either monitor status directly with the creditor (you're entitled to account information and most lending institutions offer automated account status via telephone or even Internet,) conduct regular credit checks on yourself (that can get costly and drive your FICO scores down) or refinance the loan into your own name, based on your own 'credit merit.' If there are no issues with the account, you're likely to face some resistance without the other party's cooperation and a great deal depends on your own financial situation and past credit history. It also depends on whether or not you're first in position on the contract as well. (Quite a few creditors insist on dealing directly only with the primary account holder; it depends on how the loan agreement reads and federal financial privacy act laws are very stringent upon how much information can be disclosed.)

Personally, I'd suggest you have the account information set up in your name as well, either via telephone or even the Internet, so you can access it on a regular basis. You might want to make sure that's in place as soon as possible, while the 2 of you are still on speaking terms. You've posted nothing to suggest the account's in trouble at this point, but you show a remarkable sense of responsibility in voicing concerns of the future. FYI: as a whole, most creditors don't distinguish between the types of 'bad debts,' (barring bankruptcies and foreclosures, of course.) Defaulted student loans aren't the worst thing to ever happen in the credit sense, but they do contribute towards derogatory ratings and depending on your jurisdiction, can take up to 10 years to disappear from your credit history. Taking steps now to avoid that shows a certain credit responsibility & maturity. Kudos to you for looking ahead.

Just a few opinions/suggestions here. Good luck to you.

OMG.. do you make this stuff up as you go along?? And yes, people DO put more weight on student loan defaults, especially since one of the things that the government can to do cure the default it to cancel licensure--something that might have an affect on, Oh, I dunno, say EMPLOYMENT? You bet there is a difference.

Some loans, such as Perkins loans can be reported to the credit bureau indefinitely. NOTE: if the OP is talking about federal student loans, the rules are stricter than just a non secured personal loan.

Don't take my word for it--read on.


Filing Bankruptcy with Student Loan Debt


For many individuals with mounting debt, unfortunately the best way to get out of the red is to declare some form of personal bankruptcy.
With the average college loan debt around $19,000, it can be quite a burden for people watching every penny. The average credit card debt is around $10,000. Fixed cost payments usually consist of mortgage, car, insurance, utility, and in this case student loan payments. As mentioned before, if the average debt in America for student loans is 19K, then that monthly payment is likely to be high, right along with mortgage and car payments.
Forgiveness of Student Loans after Bankruptcy

It would be nice to just wipe the slate clean concerning all of your debt, including student loans. However, being forgiven for your student debt is only reserved for those truly in need, and by this I mean it's a rare occurrence.

Forgiveness is reserved for those who can demonstrate that having to pay off their student loans will cause undue hardship. This is determined by the bankruptcy court. Student Loans are rarely forgiven since they are government funds that were dispersed with low interest to people with no credit history. You don't expect the IRS to forgive you on all taxes that are owed, so expect the same treatment with your student loan.
Bankruptcy Court and Your College Debt

Most student loan debt is secured debt that was borrowed from the federal government that cannot be erased. Unsecured student loan debt from private and non-profit organizations is also not erased by bankruptcy. This law went into effect on October 17, 2005.

You may be wondering if there is a difference between a Chapter 13 and Chapter 7 bankruptcy when it comes to student loan debt. The answer is no, they cannot be erased. There are a few options that the court may decide so that your student loans get paid first and have a priority over any other unsecured debt that you may have.

Student Loans are often put into a separate category by the bankruptcy court to give it priority. Debt that receives the lowest priority is usually credit card debt. The court may decide, in a Chapter 13 bankruptcy, to allocate most of your monthly payments to your student loans and away from unsecured debt such as credit card debt.