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  1. #1
    Join Date
    Jan 2013
    Location
    Riverside, California, United States
    Posts
    1

    Default Can a Third Party Sue Primary Borrower After Settling Debt

    My question involves collection proceedings in the State of: California

    My father co-signed for a student loan for a cousin of mine and now she is defaulting on the loan. Debt collectors are now calling my parents and continue to harrass them. My dad has tried talking to her to get her to pay the loans, as well as talked with his own sister (her daughter who has defaulted on loans) to get her to help her daughter or try to figure out a way to get back on track with the loan. She still hasn't. And this has ruined my dad's relationship with his own sister, because of this issue.

    It has already started to ruin his credit, etc. My dad is disabled, cannot and has not worked in the past several years and is only collecting disability, social security and union compensation (he was a carpenter when he was working). It has progressed so far that they don't know what more to do.

    My thoughts and question is, if I were to step in and help by paying the debt off with my own money to help MY DAD, not her, to get the debt collectors off his back, can I turn around and file a lawsuit (sue) her, which is the primary borrower of the loan in the first place, for the money that I paid to help my parents with the debt?

    I would like to try to settle the debt for them, pay what is owed to get them to stop bugging them, and then turn around and sue my cousin for the money I'm willing to pay. Can I do that?? Any advice? She may not have the money to pay it back to me, but I will go after whatever it takes to get reimbursed. Would it be worth it at all? I really hate seeing my parents worry over an issue that isn't their's to worry about in the first place.

    What I really don't understand is that she has a Master's Degree (which is what the student loans paid for) yet she has no job? WTH?? And her deadbeat husband, who also has a Master's or Bachelor's Degree, works at The Home Depot? Really?? What is all this mess for in the first place? That's what really irks me about this whole thing. They go to school, get all these degrees and don't have nothing to show for it all. And then go and ruin someone else's credit and financial stability for nothing! (Sorry, had to vent about this)

    Because I know it may be impossible for my dad to get removed from that loan or be removed from that debt. I would hate for them to garnish the little bit of money he gets from disability and social security.

    HELP! Thanks!!!

  2. #2
    Join Date
    Sep 2011
    Location
    OH10
    Posts
    17,019

    Default Re: Can a Third Party Sue Primary Borrower After Settling Debt

    You can certainly pay the loan off, however dad can ultimately be responsible for 100% repayment, with no recourse. You are not going to develop a case for recovery against her.

  3. #3
    Join Date
    Sep 2005
    Location
    Behind a Desk
    Posts
    98,846

    Default Re: Can a Third Party Sue Primary Borrower After Settling Debt

    If you pay off the loan, that does not give you any standing to sue the borrower. You would be making a gift.

    If your father wants to borrow the money from you, pay off the loan, then sue the borrower, that may be a viable option (noting we do not have the detailed facts), but there's the old saying, "You can't get blood from a stone". If the cousin can't or won't pay her loans, odds are she can't or won't pay a judgment.

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