Although you may have been forced to take on a loan for a newer car or that first home, or tuition for school, you were probably excited, looking forward to the future even as you went into debt—perhaps for the first time, and perhaps with a co-signer. Often, loans are not possible, however, without the addition of a co-signer (usually a parent). Although the process is usually explained in detail and written in the fine print, a co-signer may find themselves extremely dismayed to be in the hot seat because you are not able to pay your loan back or have defaulted on a student loan.
The private student loan is a good example of how a creditor may be coming after you but re-directs their efforts onto a very surprised co-signer when you cannot satisfy the debt. Private student loans are having a direct and negative effect on many of the over 44 million borrowers out there today, continuing to add to the cumulative student loan debt that has now topped over $1.5 trillion. After an account has become delinquent and gone into default (and this is technically true as soon as you miss a payment, although it is not usually called a default until after 270 days), you are at risk of being sued.
Not only that, if the creditor is not able to see the debt satisfied through you, they may have the co-signer served with a lawsuit. If they do not take it seriously, and do not reply or go to court, they may then have a default judgment granted against them. Most likely this is something they never saw coming! Just like any other judgment though, the creditor or loan servicer can have their wages garnished, property seized by local law enforcement and sold off at public auction and see bank accounts levied.
Such activity and consequences brought upon your co-signer may not only upset them and leave them wondering how to deal with such aggressive legal action brought upon them, but also cause great strain on your relationship. You may feel extremely guilty, and they could either be very understanding about your legal and financial troubles—or they may be frustrated with your problems are affecting them adversely.
Have you experienced problems with your loan service provider or student loan program, or are you in danger of defaulting on your student loan?
Speak with an attorney from Fitzgerald & Campbell, APLC as soon as possible to examine your options. Our attorneys have decades of experience in serving clients as they navigate through challenging financial situations, to include student loan issues, bankruptcy, and other debt management processes. We are here to help! Click here to schedule a free 30-minute consultation, call us at (844) 431-3851, or email us at firstname.lastname@example.org.