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My Fiance Cosigned for My Private Student Loans. – Tori

By on September 14, 2010
My Fiance Cosigned for My Private Student Loans. – Tori

“Dear Steve,

In 2003, I took out a private student loan with my then-fiance as my cosigner. We broke up in 2004. I graduated in December of 2004. At that point, I had 3 credit cards. I ended up deciding to go back to school and get my Master’s degree less than 6 months later because I couldn’t make loan payments with how my income was then. By the time I completed my master’s degree in 2008, I racked up $80,000 in student loan debt, plus about $8000 in credit card debt between 7 different credit cards.

In October 2008, I lost my full time job and barely made it through with my severance check and my income from a 10-hour per week teaching job. By summer 2009, that job was eliminated, but I was lucky to land a position at a nearby nursing home in their therapy department. That made me decide to go back to school, yet again, to get into the healthcare field.

I go to school part-time in fall 2009 and spring 2010, using the last of my available federal financial aid. My job started to cut my hours drastically from 20-30 to barely 10 hours a week. Over the course of the summer, I landed 2 more jobs to make payments for school and to get my credit cards back to current (I stopped payments on them when I only had the one job and my student loan money was gone). Because of this, I decided not to go to school in the summer, but to focus on making enough money to pay off my debt.

By August, I start getting calls from the private loan company stating that I had a payment due in July. I told them I was enrolled in classes in the fall and they sent verification to the school and I started making small payments in an effort try to get it paid off (only what I could afford at the time as I was trying to pay for books and pay medical and dental expenses as well). My ex contacts me on Facebook, asking me why I haven’t paid and threatening legal action if I don’t fix it. I send him back a message saying that I am working it out. This past week, I get both a phone call and a letter. While I’m talking to the representative, I find out that they never sent a verification statement to my school and it will be another 4 to 6 weeks before they get an answer. They also told me that I can pay $2000 to get my ex off of the loan and that I no longer have grace periods (even though I was enrolled in school for the following semester).

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What should I do in this situation? I have tried to see about getting a personal loan from my bank, but I got denied due to my income (I’m working almost 30-40 hours a week along with going to school, but my pay ranges from $8-$10 an hour) and my past dues on my credit cards. I’m really scared about doing something like credit counseling or bankruptcy, just because I know they won’t clear up the student loans. Finally, what should I do about the ex? I know I really don’t want to deal with him legally and I have blocked him from contacting me ever again on Facebook.

Tori”

Dear Tori,

I would go to your school financial aid office and see if they can expedite the lender request.

Depending on how much other debt you have, bankruptcy may be an option. If you discharged the other debt you would have ore money available each month to direct towards the student loans.

As far as the $2,000 offer goes that’s a smart offer for your ex to consider paying. For $2,000 he can be off the hook. If he doesn’t want to pay the $2,000 he’s on the hook for the entire student loan amount. If he could put aside any emotional anger about the situation he’d hopefully see that for $2,000 he can cut his losses and run. By making the break your payment history will no longer be tied to his credit report moving forward. Frankly, if the lender is serious about taking him off for a $2,000 payment, that’s a gift.

I’m not quite sure what the comment is about no longer having grace periods. Is that a change in terms for the loan or what?

You might want to keep the lines of communication open with your ex-fiance till this gets resolved otherwise you limit his ability to deal with this and he may be more likely to seek legal action since you won’t talk to him.

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But I’m not sure what legal action he’d take against you. It seems he guaranteed the loan as a co-signer so if you don’t pay he is contractually on the hook for the entire loan. Yea, never cosign for anything.

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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.

5 Comments

  1. secured loan

    May 5, 2011 at 1:14 am

    this is a nice article through this any one can get the proper knowledge about how can he get out of debt. thanks for sharing your thoughts with us

  2. Steve Rhode

    September 14, 2010 at 12:17 pm

    It would be one thing if he had loaned you the money and you owed him but he guaranteed the loan as a co-signer. I just don’t think he understands this is his loan also. As a cosigner he has all the liability with none of the benefit.

    The grace period thing sounds like it needs some further investigation on your part. It sounds like a technical issue and it would be good to nail down exactly what the policy is/was at the time. It might just be that 5 hours was not enough but it also doesn’t sound like you’ve received a satisfactory answer on this. Keep working it.

    You might want to send your-ex the link to this post so he can see the situation from my point of view as well.

    Please keep me posted.

  3. Tori

    September 14, 2010 at 11:59 am

    Thanks for the advise, Steve. Over the past couple of days, I have started making small payments to the past due amount. Also, after having the run around with the student loan company, I was able to finally get the verification paperwork to my school for them to fill out. Right now, that matter is in their hands. I’m also preparing several scholarship applications to help with the cost of classes for this spring. Any bit of extra money is going to help with getting rid of some of this debt.

    As for the no grace period thing, I was told I used it in the fall of 2007. I was still enrolled in school (working on my master’s thesis and taking 5 hours of classes, but it was not enough to override the grace period…or I don’t think). I started making official payments on this loan in February of 2008.

    As for my ex, I’ll reopen communication channels with him if he has any other questions. I have a feeling that if he goes for the $2000, he will go after me for the $2000. That’s the only thing I can think of that he can go after me for. Thanks again!

  4. Tori

    September 14, 2010 at 3:59 pm

    Thanks for the advise, Steve. Over the past couple of days, I have started making small payments to the past due amount. Also, after having the run around with the student loan company, I was able to finally get the verification paperwork to my school for them to fill out. Right now, that matter is in their hands. I’m also preparing several scholarship applications to help with the cost of classes for this spring. Any bit of extra money is going to help with getting rid of some of this debt.

    As for the no grace period thing, I was told I used it in the fall of 2007. I was still enrolled in school (working on my master’s thesis and taking 5 hours of classes, but it was not enough to override the grace period…or I don’t think). I started making official payments on this loan in February of 2008.

    As for my ex, I’ll reopen communication channels with him if he has any other questions. I have a feeling that if he goes for the $2000, he will go after me for the $2000. That’s the only thing I can think of that he can go after me for. Thanks again!

    • Steve Rhode

      September 14, 2010 at 4:17 pm

      It would be one thing if he had loaned you the money and you owed him but he guaranteed the loan as a co-signer. I just don’t think he understands this is his loan also. As a cosigner he has all the liability with none of the benefit.

      The grace period thing sounds like it needs some further investigation on your part. It sounds like a technical issue and it would be good to nail down exactly what the policy is/was at the time. It might just be that 5 hours was not enough but it also doesn’t sound like you’ve received a satisfactory answer on this. Keep working it.

      You might want to send your-ex the link to this post so he can see the situation from my point of view as well.

      Please keep me posted.

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