TERI about to default - what to do?
I am co-signor of TERI loans for my son 23 who graduated barely two years ago. I am unable to pay as I have always been on Disability and am about to be forced to file bankruptcy. They accepted me as co-signor knowing I was on permanent Disability and limited income. My mom always helped us, and I was living with her at the time loans were made, but she passed away 2 years ago and thus I have fallen into serious debt in paying rent and food and medical. So I can no longer help son financially. This is how I became involved in all the calls from the collection company.
The loans just went 90 days deliniquent and are headed to default. The loans he has with Sallie Mae ($58,000) have been extended on deferrment for one year, but the owner of TERI loans made thru a private bank originally would not extend deferrment again and they are now in collection. He was paying for awhile when last year he could not find work for 4 months, lived on my couch and just recently found a roommate who is willing to wait on rent knowing the future is looking better for my son. Since TERI will default soon what should he do at this point?
The company he is now doing temp work for just told him they will hire him full time for 4-6 months to complete a specific job for them. If he defaults on TERI will they garnish wages for as long as they can from this company? He cannot afford the payment they are asking for, yet if they garnish wages will they ask for more and get it thus causing additional problems with his being able to pay auto loan, etc. ? He is barely meeting his current obligations, is paying on 3 private loans with Salliemae, his school for another loan, and all bills and we are both concerned that after my bankruptcy without a little help from him, I will be living on the street as I will no longer have access to loans or credit cards to subsidize my Disability as I will no longer have my mom's help to pay them.
My concern is now that he is being offered a full time job for 4-6 months with his temp job company, that the collection company will garnish wages for more than the amount - but if he starts making payments now for duration of current job in hopes that after 6 months he will have other employment this means he will not be able to help with my rent at all. If I am unable to pay my rent on lease which expires 5/20/07 then they will go after my son as he had to sign the lease with me in order for me to qualify financially. So either way someone will be chasing after him. He has a potential fulltime job in July which would allow him to pay the TERI loans if they could wait. Does defaulting mean he will have to pay more in July than what they are asking now?
So the option is: is it worse having TERI loans default and have them go after judgment, thus allowing son to help with my rent for 5 more months - or is it better to start payments on TERI and then have no money to help with my rent causing me to default on rent and landlord will then go after him for rent for the remainder of the lease and I will have to find a place to live in a month rather than in 5 months.
How long does it take a collection company to go from default of loan to judgment to garnish of wages? My son has no intention of never paying these loans back and realizes he will be paying on Salliemae ($58.000) and TERI ($50,000) for the rest of his life and when finally paid he will have paid each of them 3 plus times the amount of the original loans. Such is life for making the loans in the first place.
He has found that the multimedia/internet work he does and is excellent at and has amazing reputation has never required him to have BA. All they care about is that he can do the work. He wonders now if it was worth all the loans to get the piece of paper. I wish legislation would make changes in the laws that allow so many bank and loan companies to prey on college students offering to give them so easily whatever amount they need (want?) to complete college, including living expenses as in my son's case, since I had no money to help him pay any expenses at all above what he made working for school parttime. Student loans have enabled many to get a college education they would never have been able to get otherwise, and this is good. But I wonder how many more lives it has ruined when the students have to pay back the loans at high interest rates thus ruining their credit when things get momentarily difficult for them, especially when starting out at lower salaries, and otherwise making money on them for the rest of their lives.
What should our immediate action be? And how does one change legislation on this?
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Re: TERI about to default - what to do?
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