NEED ADVICE...... NEED TO GET OUT OF A CO-SIGNED LOAN

[ARCHIVED THREAD] - NEED ADVICE...... NEED TO GET OUT OF A CO-SIGNED LOAN (Page 1 of 2)

Posted: 9/8/2010 4:42:51 AM EDT

Here it is in a nutshell. My parents have way high credit score, they have property investment and worked hard to achieve what they have. In 2003 they co-signed for a loan for my brother to go to school. Well, he is defaulting on his loan and now they are coming after my parents.

I think the amount is around 15k and its through Sally Mae.

Any legal way for them to get out from it and shift it all to my brother... the idiot

Posted: 9/8/2010 4:44:11 AM EDT

[#1]

Probably no.

They had your parents co-sign because they knew your brother wouldn't pay.

Posted: 9/8/2010 4:44:21 AM EDT

[#2]

No. They are responsible for paying it.

I hate to sound hateful, but they should not have co-signed if your brother was going to flake out on it.

Posted: 9/8/2010 4:44:23 AM EDT

[#3]

Not with student loans...

Posted: 9/8/2010 4:45:25 AM EDT

[#4]

Doubtful. Isn't that the whole reason behind a co-signed loan? Sorry for your parents' luck but it seems they should have thought it out before signing.

Posted: 9/8/2010 4:46:37 AM EDT

[#5]

Refinance the current loan with just your brother on it. If he hasn't been paying it now that's probably not going to happen. I'm sorry to say your parents are stuck with it as being a co-signer is essentailly a guarantee that if the primary doesn't pay that you will. It sucks ...

Posted: 9/8/2010 4:47:12 AM EDT

[#6]

I forget what it's called but is it the kind of loan where they lenders have to go after your brother first and exhaust their efforts before going after your parents? Oh what the heck is that called? Or can they just jump right on your parents after the first attempt.

I guess it's a mute (yes I said mute) point since your brother doesn't have any assets to go after most likely.

Posted: 9/8/2010 4:49:04 AM EDT

[#7]

sounds like bubba needs a boot in the ass...get on it

Posted: 9/8/2010 4:49:04 AM EDT

[#8]

Quoted:

Any legal way for them to get out from it and shift it all to my brother... the idiot

The definition of a co-signature is someone who promises to pay the loan if the signer is unable or unwilling.

That's what ya call "on the hook".

Posted: 9/8/2010 4:49:38 AM EDT

[#9]

Tell your parents to pay off the loan and deduct that amount from your brother's inheritance.

Posted: 9/8/2010 4:51:44 AM EDT

[#10]

I was afraid of that.... My dad did it out of goodness, thinking its for education and it would help him with his career. My dad came from Communist Yugoslavia in 67, he was 14, so he was big on me and my brother getting a education, even if he had to co-sign

They co-signed my loan so I could go to a Tech school, but once I got out, I refinanced it under my name only. My brothers/wifes credit is FUBAR ....idiots

Posted: 9/8/2010 4:52:34 AM EDT

[#11]

That's what co-signers are for. They volunteered to be responsible for his debt if he defaulted and now it's on them.

Posted: 9/8/2010 4:54:56 AM EDT

[#12]

Quoted:

I was afraid of that.... My dad did it out of goodness, thinking its for education and it would help him with his career. My dad came from Communist Yugoslavia in 67, he was 14, so he was big on me and my brother getting a education, even if he had to co-sign

They co-signed my loan so I could go to a Tech school, but once I got out, I refinanced it under my name only. My brothers/wifes credit is FUBAR ....idiots

Your father must have had a good idea that he'd get stuck with the bill before he co-signed for it

Posted: 9/8/2010 4:55:25 AM EDT

[#13]

Quoted:
Probably no.

They had your parents co-sign because they knew your brother wouldn't pay.

1st one gets it.

Unfortunately, your parents' benevolence will be used against them (and rightfully so in this case). I know co-signing is taken lightly by most people, but a lot of things can change over time and they are going to learn a hard lesson about their Son on this one.

I'd take your aggrevation and channel it towards your brother - and helping your parents out in any way possible.

Posted: 9/8/2010 4:56:49 AM EDT

[#14]

Quoted:

Tell your parents to pay off the loan and deduct that amount from your brother's inheritance.

+1

It's time to make up a new will.

Posted: 9/8/2010 4:57:11 AM EDT

[#15]

Quoted:
Probably no.

They had your parents co-sign because they knew your brother wouldn't pay.

First answer

Posted: 9/8/2010 4:58:47 AM EDT

[#16]

I heard the other day that about 50% of all cosigners end up footing the bill. I don't know if that's right, but I wouldn't be shocked.

Posted: 9/8/2010 5:00:50 AM EDT

[#17]

Quoted:

Quoted:

Tell your parents to pay off the loan and deduct that amount from your brother's inheritance.

+1

It's time to make up a new will.

Posted: 9/8/2010 5:06:22 AM EDT

[#18]

Quoted:
Tell your parents to pay off the loan and deduct that amount from your brother's inheritance.

This. Also, since your brother and sis-in-law have no financial savvy, your parents should also consider leaving their inheritance to your brother in a trust that pays him regularly for the rest of his life. My grandparents did this with my uncle.

Posted: 9/8/2010 5:07:03 AM EDT

[#19]

Quoted:
I heard the other day that about 50% of all cosigners end up footing the bill. I don't know if that's right, but I wouldn't be shocked.

Probably. It isn't a coincidence that they need someone to cosign for them. The have shitty credit because they don't pay thier bills.

Posted: 9/8/2010 5:28:45 AM EDT

[#20]

Unfortunately not!

Expensive lesson learned.

Posted: 9/8/2010 5:37:18 AM EDT

[#21]

Quoted:
I heard the other day that about 50% of all cosigners end up footing the bill. I don't know if that's right, but I wouldn't be shocked.

It probably is. Anyone who cosigns is foolish indeed. Look at it this way––if the bank, who is in the business of loaning money, doesn't trust the borrower, and thus demands a cosigner, then the cosigner SHOULD NOT trust the borrower, regardless of the sad story or lame excuse for why a cosigner is needed.

Guys––NEVER, EVER, EVER, EVER cosign for ANYONE. Not under ANY circumstance. It is a fool's mission.

Posted: 9/8/2010 5:43:10 AM EDT

[#22]

Quoted:

Quoted:
I heard the other day that about 50% of all cosigners end up footing the bill. I don't know if that's right, but I wouldn't be shocked.

It probably is. Anyone who cosigns is foolish indeed. Look at it this way––if the bank, who is in the business of loaning money, doesn't trust the borrower, and thus demands a cosigner, then the cosigner SHOULD NOT trust the borrower, regardless of the sad story or lame excuse for why a cosigner is needed.

Guys––NEVER, EVER, EVER, EVER cosign for ANYONE. Not under ANY circumstance. It is a fool's mission.

Read this again so it sinks in......especially the part about if the bank thinks they are a bad risk, they are a bad risk.

If you co-sign, you need to understand you are signing a note and if you can't afford to pay that note, you had better not sign it.

Posted: 9/8/2010 5:44:34 AM EDT

[#23]

Unfortunately, there's not much room because if your parents want to keep their high credit score (and who doesn't?) they don't have a lot of leverage to negotiate a buyout with the lender. Unless they are really willing to walk away from the loan (and ding their credit score) the lender isn't going to give them much of anything.

Quoted:
Tell your parents to pay off the loan and deduct that amount from your brother's inheritance.

I think this is the only true recourse. Otherwise they'll never get "paid".

Oh, and you should re-enact the first half of Full Metal Jacket on your brother, with you playing the part of GySgt Hartman.

Posted: 9/8/2010 5:45:19 AM EDT

[#24]

The only way out is to pay it off.

Posted: 9/8/2010 5:51:47 AM EDT

[#25]

the only way out is to pay it! and why would they want out? didnt they co-sign the note? dont you think there is both a legal and moral obligation to pay it? someone gave money to your brother becuase they co-signed the note for him. why should that 3rd party who gave the money lose it becuase your parents now want out? this is part of the problem with the world we live in, no one wants to be held to their obligations or word which is what you give when you sign a loan!

and fyi NEVER CO-SIGN OR GUARANTY A LOAN UNLESS YOU ARE PREPARED TO PAY FOR IT!!!!

Posted: 9/8/2010 5:55:47 AM EDT

[#26]

the legal way would be for your brother or parents to pay off the loan

Posted: 9/8/2010 5:57:36 AM EDT

[#27]

thats pretty much the purpose of co-signing. The person with no credit gets to use someone elses

Posted: 9/8/2010 6:11:06 AM EDT

[#28]

There IS a way they can get out of this!!!

Just need a flux capacitor, a DeLorean, and a healthy disrespect for causality.

Posted: 9/8/2010 6:14:46 AM EDT

[#29]

Quoted:

Any legal way for them to get out from it and shift it all to my brother... the idiot

Nope. There's a reason creditors require a cosigner.

And it's usually because the primary borrower has such fucked up credit that not even the Orange Tanned, idiot Angelo Mozillo (Former Countrywide CEO) would lend.

They need to pay (that's what they promised to do by co-signing) and extract their pound of flesh from your dirtbag brother.

Posted: 9/8/2010 6:16:21 AM EDT

[#30]

Quoted:
There IS a way they can get out of this!!!

Just need a flux capacitor, a DeLorean, and a healthy disrespect for causality.

An easier way might be to repay the loan.

Posted: 9/8/2010 6:24:19 AM EDT

[#31]

Quoted:

Quoted:
I heard the other day that about 50% of all cosigners end up footing the bill. I don't know if that's right, but I wouldn't be shocked.

It probably is. Anyone who cosigns is foolish indeed. Look at it this way––if the bank, who is in the business of loaning money, doesn't trust the borrower, and thus demands a cosigner, then the cosigner SHOULD NOT trust the borrower, regardless of the sad story or lame excuse for why a cosigner is needed.

Guys––NEVER, EVER, EVER, EVER cosign for ANYONE. Not under ANY circumstance. It is a fool's mission.

In 95%+ cases I'd agree, but it worked out for me. Parents co-signed on the first car (2001 Wrangler) I bought other than via private party as I had no credit. The TJ is now payed off and no issues came about.

Posted: 9/8/2010 6:26:32 AM EDT

[#32]

Your parents just learned that kids are expensive and actions have consequences.

Posted: 9/8/2010 6:39:10 AM EDT

[#33]

Quoted:

Here it is in a nutshell. My parents have way high credit score, they have property investment and worked hard to achieve what they have. In 2003 they co-signed for a loan for my brother to go to school. Well, he is defaulting on his loan and now they are coming after my parents.

I think the amount is around 15k and its through Sally Mae.

Any legal way for them to get out from it and shift it all to my brother... the idiot

No, that is what co-signing is. It means you agree to pay if the other person defaults.

Posted: 9/8/2010 6:44:07 AM EDT

[#34]

nope... they co-signed the loan, they knew they'd be responsible if your brother didn't pay up...

Posted: 9/8/2010 6:44:34 AM EDT

[#35]

Quoted:

Quoted:
I heard the other day that about 50% of all cosigners end up footing the bill. I don't know if that's right, but I wouldn't be shocked.

It probably is. Anyone who cosigns is foolish indeed. Look at it this way––if the bank, who is in the business of loaning money, doesn't trust the borrower, and thus demands a cosigner, then the cosigner SHOULD NOT trust the borrower, regardless of the sad story or lame excuse for why a cosigner is needed.

Guys––NEVER, EVER, EVER, EVER cosign for ANYONE. Not under ANY circumstance. It is a fool's mission.

In 95%+ cases I'd agree, but it worked out for me. Parents co-signed on the first car (2001 Wrangler) I bought other than via private party as I had no credit. The TJ is now payed off and no issues came about.

That's nice.

For my first car loan I paid 13% interest, as I had no credit either. That worked out too––without putting anyone else on the line.

Posted: 9/8/2010 6:51:11 AM EDT

[#36]

Quoted:

Quoted:
There IS a way they can get out of this!!!

Just need a flux capacitor, a DeLorean, and a healthy disrespect for causality.

An easier way might be to repay the loan.

Yeah, but which one would make for a better thread with AAR and MSPaint?

Posted: 9/8/2010 7:30:21 AM EDT

[#37]

Quoted:
Tell your parents to pay off the loan and deduct that amount from your brother's inheritance.

About your only realistic option, other than suing him for recovery after paying it off. When you co-sign, its your loan too.

Posted: 9/8/2010 7:32:43 AM EDT

[#38]

Quoted:

Quoted:
Tell your parents to pay off the loan and deduct that amount from your brother's inheritance.

This. Also, since your brother and sis-in-law have no financial savvy, your parents should also consider leaving their inheritance to your brother in a trust that pays him regularly for the rest of his life. My grandparents did this with my uncle.

My parents have appointed me conservator of my brother's inheritance in their will because of a similar set of circumstances.

Posted: 9/8/2010 7:33:48 AM EDT

[#39]

Quoted:

Probably no.

They had your parents co-sign because they knew your brother wouldn't pay.

This

That's why banks require co-signers for some people.

Posted: 9/8/2010 7:47:43 AM EDT

[#40]

Quoted:

Quoted:
Probably no.

They had your parents co-sign because they knew your brother wouldn't pay.

This

That's why banks require co-signers for some people.

Even if you kill your brother, it might not get them off the hook.

Posted: 9/8/2010 8:05:41 AM EDT

[#41]

Quoted:
sounds like bubba needs a boot in the ass...get on it

No shit, time to be a Brother and Son to your parents.

Posted: 9/8/2010 8:27:20 AM EDT

[#42]

Quoted:

I guess it's a mute (yes I said mute) point since your brother doesn't have any assets to go after most likely.

What the hell is a "mute point"?

Posted: 9/8/2010 8:36:13 AM EDT

[#43]

your parents just found out its more expensive to raise a loser than a responsible citizen....about $15K more

Posted: 9/8/2010 8:42:04 AM EDT

[#44]

Quoted:

Quoted:

I guess it's a mute (yes I said mute) point since your brother doesn't have any assets to go after most likely.

What the hell is a "mute point"?

It's like a moot point, but quieter.

Posted: 9/8/2010 8:50:28 AM EDT

[#45]

Your parents will have to repay the loan. Then when brother gets back on his feet, he'll pay them back.

Or more likely, they can watch him buy a new house, new cars, jet skis, and a 62" TV then complain that he's barely scraping by and can't afford to pay them back just yet.

Is he presently not paying the loan because he can't, or because he doesn't want to?

Posted: 9/8/2010 8:54:01 AM EDT

[#46]

No and they sould not be trying. THEY signed the loan.

Posted: 9/8/2010 9:25:36 AM EDT

[#47]

Quoted:

I forget what it's called but is it the kind of loan where they lenders have to go after your brother first and exhaust their efforts before going after your parents? Oh what the heck is that called? Or can they just jump right on your parents after the first attempt.

I guess it's a mute (yes I said mute) point since your brother doesn't have any assets to go after most likely.

Proud of your primary language ignorance much? MOOT.

OP - your folks are on the hook and there's nothing they can do other than possibly co-signing on a new loan with lower payments that your brother can handle. You should kick your brothers ass.

Posted: 9/8/2010 9:48:55 AM EDT

[#48]

Maybe this has been said already. Even though you are trying to be nice and help someone get a loan by Co Signing. This will effect your Credit also. Everytime they are late on a Payment it is a mark on your Credit also. Thats why you don't do things like that.