Wiping out student loans in bankruptcy?
If I wipe out student loans in bankruptcy will my cosignor’s credit be affected? My mother-in-law cosigned on 2 of my student loans and she has A-1 credit. I am considering the option of filing for bankruptcy and trying to wipe out my loans in the process. I know it will show up on my credit report which is fine…I just don’t want to affect her credit in the process. Any info would be appreciated. Thanks.
I have found out that you can claim student loans in your bankruptcy if you can prove that you can’t pay them…so I need someone who knows the law to tell me if her credit will be affected?
June 29th, 2009 at 6:40 am
You can’t wipe out student loans in bankruptcy (federal and private). Period.
Also be aware if you choose to go into default they will seize your income tax returns and garnish your wages. Also, yes your mother in laws credit will be effected if you choose not to pay them.
July 2nd, 2009 at 3:26 am
You can not default on a loan to the government. You can skate by with just about every other debt, but when you owe taxes or any other type of payment to the government, you’re in it for life. If you declared bankruptcy, your life would be almost put on hold for several years, and you may even have to move in with friends or relatives until you are able to establish credit on your own again, during that time, your expenses would be limited, so paying off that government debt would have to be a top priority for you.
July 2nd, 2009 at 10:13 am
Co-signer’s will always be affected when an account goes delinquent. Creditors are entitiled to their money and will go after their money even when one of the co-signer dies. Also, you never know what the future holds for you. It may be better to pay on federally backed student loans however you can, because not paying them back may prevent you from holding certain state and federal jobs, and it may also effect your children’s chances of getting student loans in the future. Remember when you first apply for financial aid as a 18 year straight out of high school, you apply as a dependent of your parent. You got a tough decision ahead of you. Check out the websites below for more info. Good luck. By the way your mother-in-law is a really nice lady, don’t do her wrong.
July 3rd, 2009 at 8:45 pm
You will not be able to ditch your student loans in bankruptcy. I don’t care what you read about not being able to pay them – you will not find a judge to sign off on that.
You took the loans out – now it is time to pay the piper.
July 7th, 2009 at 3:48 am
No u didn’t find out that u can wipe out student loans! Who told u that? They r the only loans u cannot discharge through bankruptsy! U are stuck with them! YES IT IS GOING TO AFFECT YOUR COSIGNERS CREDIT HISTORY! U cannot wipe out student loans negotiate with ur lender! U made ur bed now sleep in it don’t try to make it go away because it wont!
I just read about it and the only way u could do it is if your cosigner and u are in poverty and unable to maintain a minimal lifestyle and pay the loan. If ur mom makes any sort of halfway decent salary u r stuck! The loan is both yours and your cosigners! U both have to be in poverty to wipe them out!