Submitted by Linds (not verified) on June 24, 2008 - 1:31am.
I believe that cosigners should especially be given special consideration on a case-by-case basis in bankruptcies. Say a husband signs for his wife's student loans. What happens a few months later, when the two get divorced, and the wife later drops out of school after the divorce and defaults on the loan?
According to Sallie Mae, all loans belonging to the primary signer must be current, and 24 on-time monthly payments must be made before the primary signer may apply for the cosigner to be dropped (and even then, the primary signer needs to have "good credit"). I know this, because my fiance is the ex-husband. Sallie Mae jerked us around while we were struggling to get his name taken off as cosigner, telling us a different story in each phone conversation. He has nothing to do with his ex-wife, yet his name and credit are still being affected by this wasted student loan. He is now applying for bankruptcy, and obviously can't include this student loan, as he is healthy and able-bodied, and can't prove "undue hardship." As a full-time college student himself and with only part-time employment, he certainly doesn't have the money Sallie Mae is seeking.
I wish they could at least relax the laws, so that in cases like my fiance's, where he didn't reap any benefits from the loan, has no contact with the primary signer, and merely placed his name on it, he could include it in his bankruptcy.
What about cosigners?
I believe that cosigners should especially be given special consideration on a case-by-case basis in bankruptcies. Say a husband signs for his wife's student loans. What happens a few months later, when the two get divorced, and the wife later drops out of school after the divorce and defaults on the loan?
According to Sallie Mae, all loans belonging to the primary signer must be current, and 24 on-time monthly payments must be made before the primary signer may apply for the cosigner to be dropped (and even then, the primary signer needs to have "good credit"). I know this, because my fiance is the ex-husband. Sallie Mae jerked us around while we were struggling to get his name taken off as cosigner, telling us a different story in each phone conversation. He has nothing to do with his ex-wife, yet his name and credit are still being affected by this wasted student loan. He is now applying for bankruptcy, and obviously can't include this student loan, as he is healthy and able-bodied, and can't prove "undue hardship." As a full-time college student himself and with only part-time employment, he certainly doesn't have the money Sallie Mae is seeking.
I wish they could at least relax the laws, so that in cases like my fiance's, where he didn't reap any benefits from the loan, has no contact with the primary signer, and merely placed his name on it, he could include it in his bankruptcy.