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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Bankruptcy Law
Satisfied Customers: 112717
Experience:  Attorney At Law handling education matters.
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HELP - (A little story - We applied and received approval

Customer Question

HELP - (A little History - We applied and received approval for our son’s student loans thru ConSern (1995-1999). His student loan was later bought out by Wells Fargo (WF). We paid his school loan from 1999 – October 2015.) Unfortunately for us, our son filed Bankruptcy in October, 2015. His school loan was included. We were co-signors and had no say in his filing bankruptcy. (Wrote to Senate Special Committee on Aging – they could not help us so they encouraged us to write to Sen. Kaine and Sen. Warren.) Before he graduated, my husband and I started paying back his loans, ON TIME,, NEVER LATE ($600+ monthly) . Our credit history stayed in the 700+s before his filing in October 2015. Our credit scores are now in 644s and 658s. We received directions from his Lawyer to stop making any further payments because his case would still allow money being paid back to WF. Biggest mistake we could have done made. We have tried in vain to communicate with his lawyer, since the end of October 2015 via mail, email, phone calls and faxes, with no responses. She said if we had any problems with WF, to let her know. Our credit has ALWAYS been IMPORTANT to us – but I’m told there is nothing we can do in this situation. WF’s response to us was: the loan was charged off on January 31, 2015, due to serious delinquency (the advice from his Lawyer). They said that they wanted us to play the in full. His bankruptcy loan automatically carried us over (??) since we are the co-signors of the original loan. On our credit report, they changed school loan to myself only, not my son. But we can’t talk to anyone at WF because we are not on his WF bankruptcy loan (??)
Submitted: 10 months ago.
Category: Bankruptcy Law
Expert:  Law Educator, Esq. replied 10 months ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
Unfortunately, student loans are an area of much frustration and legally something that so little can be done about. Sen. Warren and her supporters on the issues of student loans are correct in that the system needs to be fixed, as student loans can end up a financial death sentence. I am afraid that legally, when someone co-signs a loan, as I am sure you have been told, they agree to be bound to pay if the principal borrower does not pay. In this case, unless your son's bankruptcy discharged those student loans (which is very rare) he is still liable for the loans, but so are his co-signers and legally there is no way to be removed from them.
The sky is not all black though, many times using a consumer protection attorney locally can assist people in negotiating a payoff for less than the full amount due. It is a time consuming and many times frustrating negotiation process, but we have seen some consumer protection attorneys to get the student loan companies to take 50%-60% of the total due on the loan as settlement of the debt. It just depends on how good at negotiation and how much time the attorney puts in with negotiating with them.
I am sure you may have known or been told all of the above, but you did not say. However, you did not say what your specific question for us is about this matter and if you could please let us know we would appreciate that.