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I Don’t Want to Ruin My Cosigners Credit But I Need Help! – Joe

“Dear Steve,

I hope you can lead me in the right direction.

I am in serious debt trouble. I don’t know were to go from here. My debt is out of control with 2 bank loans 5000 a piece, 1 credit card $16,000 which I have a cosign on and have never been late. 2 student loans one 20,000 the other i have a co signer on it and its $6000 I have never bee late on them. $10,000 in back tax’s from 3 different states, I had a truck lease and the overage mile bill came back at $3000.

My credit is shot I have a past bankruptcy thats falls off next march. My wife was recently was laid off, her credit is good, in her name only is a $2000 a month mortgage and car payment of $330 which have never been late. she also has a wedding loan for $10,000. which has never been late. Our utilities are around $600 a month. life ins and car ins is around $300 a month. we just had a child 8 weeks ago. every week my checking account is in the – and I can’t get ahead. What are my options. I don’t want to ruin my co-signers credit so I can’t do debt consolidation. I don’t know who to call for help that I can trust.

Any info will help me

Thanks Joe”

Dear Joe,

The cosigner issue is a wrench in the works for sure. The problem is the reason the lender got a co-signer is if you did not make the payments as agreed they’d go after them for payment.

Co-signers often think they are doing a friend a favor and helping them to get approved for the loan. What they fail to understand is they are 100% responsible for the loan if the primary person does not pay.

In order to avoid any impact on the cosigners credit you should be open and honest with them about your situation. The best solution would be for you to make the payments as promised but the next best step would be for the cosigner to help you make those payments.

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Any solution that modifies the loan can and will have some impact on the cosigner.

If you can’t afford the regular monthly payments on the debts then a solution like a credit counseling program may not feasible but you can click here for credit counseling information to check it out for yourself based on your specific debts. A credit counseling group will probably be able to reduce your interest rate and the cosigner may have to enroll with you in that program since they are on the loans but it will minimally impact their credit when the credit card account is closed. The credit counseling group will not be able to assist you with the student loans. For student loan help in modifying your payment look into the Income Based Repayment (IBR).

Any other solution like bankruptcy or debt settlement will negatively impact the credit of the borrower and drive lenders to the cosigner for full payment.

The only other logical solution that comes to mind is possibly an unsecured debt consolidation loan from The debt consolidation loan is a fixed rate and for three to five years. The limit on the loans is $25,000 so while you would not be able to consolidate all your debt, you might be able to consolidate the debt your cosigner is one and get them out of the loop.

My Advice on Cosigning: If someone asks you to cosign, think of Nancy Reagan and Just Say No!

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

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About the author

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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