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  1. #1
    Join Date
    Jul 2011

    Default Unable to Pay Student Loans

    My question involves collection proceedings in the State of: Pennsylvania (student loans taken out for school in NY)

    While my parents were separated, my Mom co-signed some student loans for me. My parents recently got back together...what can I Mom is a masochist.

    He's abusive, emotionally and physically. He's a loose cannon, he's arrogant and hateful and thinks he's above the law. He's also manipulative. He wants me to think I'm trapped...

    I know I should file a report but I don't want to go there. It'd just escalate things. What I'm concerned with is my student loans. He wants me to believe that I'm the only one who stands to lose anything if I can't pay them off...he wants me to feel afraid and trapped. So I'm trying to figure out who stands to lose what here...

    If he refuses to help me return to school - which, btw, is something he did/does solely to keep strings attached to me, he's said as much himself - I'd have to start making payments on my loans. I can't afford to pay them as well as pay rent, buy food, pay for gas, etc.. Wouldn't it then fall to my Mom to pay? She can't afford it either. What then? Could they do anything with her property? Both of their names are on the house, does that keep it safe?

    I know my credit would be would my Mom's... The idea here is to figure out if he's safe. He wouldn't want to lose any money and he wouldn't want to ruin his reputation if any of this got out. So if he stands to lose more than he'd like to admit to me, then it's okay for me to go ahead with my plans to move in with a friend. He wouldn't hurt himself to spite me. I'm not trying to get back at either of my parents, it's just kind of like a mean game of chess...he wants me to think I'm stuck and I want to know if that's actually the case before I go ahead and leave...which would be, in essence, standing up for myself and he doesn't like when people do that...

  2. #2

    Default Re: If Unable to Pay Student Loans

    I'm sorry to hear about your problems with your father. I suspect that you are probably younger than me given that you're in school. Let me assure you that you will be crossing paths with people like your father all your life and the best way to handle them is to learn to stand up to them early and often (people like this tend to back down the minute that someone becomes a challenge --- it's not personal, it's about THEM, and you're just a convenient target).

    In any case, as to your legal questions, you are correct that if the loans go into repayment that you will be responsible for paying them. Given that they required a cosigner, it sounds as if they are private loans, though I could be out of the loop as far as today's student loan categories go. In any case, if they're private, the lender will have less collection power than if they're federal. But if they're federal, you have more rights, such as income based repayment, where if you have no income your repayment per month will be zero. So first figure out if they're federal or private.

    If they're private, this would be like defaulting on a credit card debt that you couldn't pay. The only difference is that you can't declare bankruptcy and be rid of them. Your mom is absolutely on the hook as a consigner and they can go after you OR her OR both. They would first have to sue and get a judgment before they could start taking assets. They would probably sue her given that she has more net worth than you. Each state has certain protected assets that can't be touched by a creditor who wins a judgment. You'll want to find out what those are for your state.

    Each state has different laws on whether marital property can be touched as part of a judgment. I don't know to what extent your father's credit score will be hurt or whether the home is protected. Perhaps someone who knows Pennsylvania law can help out here.

  3. #3
    Join Date
    Jul 2011
    Los Angeles

    Default Re: If Unable to Pay Student Loans

    Try to get DIRECT Student Loans if at all possible. It’s the same Stafford/Perkins loans, but these loans come straight from the US Dept. of Education and are not routed through agencies like Sallie Mae. (US Dept. of Ed is MUCH easier to deal with, imo.)

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