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My Husband Cosigned on My Student Loan and Now Wants to Be Left Out

By on November 4, 2016

Question:

Dear Steve,

I am buried in student loan debt and probably have the biggest total of anyone you have talked to for a number of reasons I can get into later if you want to know.

But basically, I am around 200k in debt, some private, some federal. One of the private loans is in default for about 30k. The others are current. I was an intern until last year and making very little and consulted w/ bankruptcy lawyers. Now, I just two months ago got a decent paying job, and mine and my husband’s combined income after taxes is approximately 9k/month, but with all this debt, it doesn’t actually go very far. I need to deal with the defaulted account ASAP, since it has been in default about a year and a half and I want to deal with it before they sue me.

My husband is cosigned on two of the loans, one private and one federal and he does not want me to negotiate those (by way of not paying for a while to get a better negotiation) because he doesn’t want me to drag his credit down even further.

I am considering hiring this lawyer for at least the defaulted loan to get me some kind of settlement.

I am also considering going with a debt relief company ( I am researching reputable ones vs scamming ones) and wondering if that would be my best option. What is your opinion about what avenue I should take here?

Thanks!

Anya

Answer:

Dear Anya,

I’m not sure how your husband cosigned for a federal loan since a cosigner is not required for most federal student loans. Now you might have a Direct PLUS loan which required an endorser. According to the Department of Education an endorser is “someone who agrees to repay the Direct PLUS Loan if you do not repay it.”

If you have private loans he cosigned for and he does not want his credit impacted, then you need to at least make the contractually agreed on payment.

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Your level of student loan debt is a fraction of the most I’ve ever seen. But it doesn’t matter what the number is. Too much is just too much.

I get the fact you are reacting to the stressor in front of you with the defaulted student loan but before you react you need to take a deep breath and step back.

Simply reacting to the current event does not give you a long-term solution for the situation. It would be foolish to jump into a solution for the one defaulted private student loan without having an overall plan for dealing with your total student loan debt. If you do then you’ll simply be running from fire to fire.

The federal loan side it pretty straightforward. Unless you can afford the regular 10-year payment then you should look at one of the income driven repayment plans. But more information is needed to understand which plan make the most sense for you. Consolidating your federal student loans and then putting them in the right program will not hurt your husband’s credit. It will however have some potential consequences. Read Why Income Based Student Loan Payments Can Be a Terrible Trap.

Personally, at this point I think you could really benefit from talking to an independent debt coach and come up with an overall plan than jump from salesperson to closer to discuss individual strategies for only part of your problem. I recommend Damon Day for this type of thing.

While your husband might not want you to negotiate on some of the loans, the reality is the math is what it is. Either you make enough to make all of your private payments, or you don’t.

His wishing there was a different path to deal with the debt doesn’t mean there is such a path.

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About Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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