MOm wants dead son's student loans forgiven

[Gumbo4x4]

One of the spots in the show was of parents that had lost their son 2 weeks after he graduated. Guess what, they were on the hook to pay back the loan and it was for $85,000.

<<<Note to self: Never co-sign a loan with my kids unless I have a corresponding life insurance policy for the amount of the loan (or more).

 

[scrapquitler]

Unfortunately, student loans are the only loans I know that you cannot get out of even in death. etc.

If the Mom hadn't co-signed, she wouldn't be liable to pay the loans. It's no different than any other loan. Had the son bought a car and Mom co-signed, she would be liable for that. If he hadn't gotten a co-signer and his estate couldn't cover the bills, then the lender couldn't do anything about it.

 

[disykat]

Unfortunately, student loans are the only loans I know that you cannot get out of even in death. .

Most other loans you would have a product that you could return or sell to get the money back. If the loans were for a car, a house, jewelry, etc. they wouldn't let you keep the product and erase loans you agreed to take on simply because the original owner died.

 

[joviroxx]

Its very sad that this young man lost his life but this loan was co-signed. This means that she accepted the debt. The loan wasn't co-signed as a formality for an extra name. When you co-sign a loan you promise to pay it back just like the main signer. You can't make a condition that if the first person can't pay it back then you can't either. I know the situation is tragic but that's what co-signing a loan means. If they had bought a home together, and he was paying it off, should the mortgage be forgiven as well?

This is a good lesson in life planning as well. You are never too young for a life insurance policy, especially if you have debt that can affect others.

 

[luvmy3]

Wow, it seems like someone somewhere could work something out in this extreme situation. The woman doesn't have the money. She is supporting her son's child. The OP's statement that the death of her son was 'very unfortunate' made me cough on my coffee. Yeah, I would say it's 'very unfortunate' and I'm sure I wouldn't use those words if my son died when he was 24.

I'd like to know what private institution has refused to help and if they benefited as a part of the bail out of 2008. Banks are heartless. Perhaps they could renegotiate this loan making it only the principle to be paid back and the payments more manageable.

And people are stupid. If that woman couldn't pay the loan back, then she shouldn't have co-signed for it. Banks aren't there to make sure people are OK, they are there to make money. They don't need to have a heart, people who use them just need to have brains.

 

[eliza61]

Ugh. Never co-sign for a loan.

A former pastor of mine co-signed for a student loan for one of his parishioners. A few years later, he was sent to collections for failure to pay back the loan. The parishioner was long gone, but his debt was still alive and well, growing like Hydra.

That's pretty much my mantra. Dh and I didn't even have joint credit cards.

edited: My friend Ms. SJ below is a smart cookie. she is absolutely right we did jointly own our house. I totally forgot about the mortgage. 10 lashes with the wet noodle for me!!!

We did have seperate car notes and credit cards and he had a business loan for his business. when he passed away my attorney contacted all parties. I have not been responsible for a single bill.

 

[SaraJayne]

Unfortunately, since she co-signed the loans, they have now become her responsibility.

 

[SaraJayne]

That's pretty much my mantra. Dh and I didn't even have joint credit cards.

Eliza, how did you you sign a mortgage note if you never co-signed anything?

 

[Handbag Lady]

It was said earlier as a joke, but why not ask all of those people who signed the petition to donate a very small amount of money.

They seem to care enough to say something, how much harm would adding a dollar be in the end?

 

[eliza61]

And people are stupid. If that woman couldn't pay the loan back, then she shouldn't have co-signed for it. Banks aren't there to make sure people are OK, they are there to make money. They don't need to have a heart, people who use them just need to have brains.

but wouldn't it make more financial sense if they did have a heart and head.

For example, my mom died owning a boat load of cc bills. As you said the banks that gave them to her didn't care that she didn't have a huge salary ( civil rights attorney and later legal aide). anyway when she passed since my dad was not legally responsible for the money he did not pay them off. Politely gave them the plot # and address to her cementary and live until he was 85.

So basically I guess my mom was one of the stupid people but what would you call the banks because they sure as heck where on the hook for the dough.

I guess my point is, in all likelihood this women will Not pay the loan off and go on with her life. I know a number of my college friends who have defaulted on their student loans and are happily having a life with mortgages, car notes etc etc.

So I'm not saying not to have sympathy but the bottom line is, it is in the bank best interest if they don't give out money to any body that ask. because sooner or later if you are a bank with a lot of unpaid loans on your spread sheet you become insolvent.'

As my dad loved to say. Unless you are the IRS you only get money if I decide to pay my bill.

 

[eliza61]

Eliza, how did you you sign a mortgage note if you never co-signed anything?

hey you're absolutely correct. I totally forgot about my mortgage.

Smart cookie.

 

[scrapquitler]

Most other loans you would have a product that you could return or sell to get the money back. If the loans were for a car, a house, jewelry, etc. they wouldn't let you keep the product and erase loans you agreed to take on simply because the original owner died.

Well when my Grandma died, she had credit card bills and not enough money in her estate to pay them off...nobody else in the family was obligated to repay that. My dad did have to pay off the one card they had that was a joint one

 

[Robbi]

Too bad so sad
You co-sign, it's your loan. Ignorance is no excuse. It's sad that her son died but there are millions of people going through tough times who still meet their obligations.

 

[sissy_ib]

but wouldn't it make more financial sense if they did have a heart and head.

For example, my mom died owning a boat load of cc bills. As you said the banks that gave them to her didn't care that she didn't have a huge salary ( civil rights attorney and later legal aide). anyway when she passed since my dad was not legally responsible for the money he did not pay them off. Politely gave them the plot # and address to her cementary and live until he was 85.

So basically I guess my mom was one of the stupid people but what would you call the banks because they sure as heck where on the hook for the dough.

I guess my point is, in all likelihood this women will Not pay the loan off and go on with her life. I know a number of my college friends who have defaulted on their student loans and are happily having a life with mortgages, car notes etc etc.

So I'm not saying not to have sympathy but the bottom line is, it is in the bank best interest if they don't give out money to any body that ask. because sooner or later if you are a bank with a lot of unpaid loans on your spread sheet you become insolvent.'

As my dad loved to say. Unless you are the IRS you only get money if I decide to pay my bill.

When you mother passed her estate was responsible for any debt. Once the estate is empty the debt is not transferable. The difference is this woman had her name on this loan. If the credit cards were only in your mothers name no one is responsible once her estate is settled. If they were joint accounts with your father he would have been responsible.

ETA: yes, it would make sense for them to work with her to come up with a payment plan she can handle. However has she tried to do that? That is on her to go to them and ask.

 

[eliza61]

Now let me ask some thing.

If she simply decides "the heck with it". what's the worst that will happen?
they can't touch her social security
Not sure if they can garnish her wages, if she has any and she has said she can't afford the loan?

 

[SaraJayne]

hey you're absolutely correct. I totally forgot about my mortgage.

Smart cookie.

I wasn't trying to catch you in an "a ha!" moment. I was truly curious, as I know some people have their houses in only their husband's name ~ but you've never struck me as that type of girl.

 

[eliza61]

When you mother passed her estate was responsible for any debt. Once the estate is empty the debt is not transferable. The difference is this woman had her name on this loan. If the credit cards were only in your mothers name no one is responsible once her estate is settled. If they were joint accounts with your father he would have been responsible.

I definitly understand the difference, my point was in reference to some one saying the banks are there to "make" money not to make sure you can afford the loan.

How much money can you make if no one is paying their loans?

So wouldn't it be in the banks best interest to at least attempt to make sure people are good candidates.

No money is no money. whether it's from an empty estate or simply non payment, the results are the same. You don't get paid.

Look at the situation we have now. People are simply walking away from their mortgages. heck they've got websites now telling you exactly how NOT to pay your mortgage. which makes banks lose value. And I know folks claim that it will mess up your credit etc, etc but I know quite a few folks who bailed or filed bankruptcy and had absolutely no problem buying that new car, getting school loans and renting apartments.

 

[timmac]

Now let me ask some thing.

If she simply decides "the heck with it". what's the worst that will happen?
they can't touch her social security
Not sure if they can garnish her wages, if she has any and she has said she can't afford the loan?

With appropriate civil litigation, I'd guess they absolutely could garnish wages (which is typically one way of enforcing collection of a debt), possibly take her home.

Whether or not the amount in question is large enough to justify such, is another question entirely.

 

[robinb]

My daughter - who is 24 and on her own and working cannot get a student loan without me co-signing. I will not co-sign. She is not my dependant anymore. They are insisting on a co-signer regardless. This is basically to ensure they will get their money one way or another.

Since the feds took away the previous student loan gravy train, the banks have had to find a new gig to loan desperate students money guarantee they will be paid. This is it.

A college education is the new indentured servitude but now parents get to pay off the debt if the students can't.

 

[trip]

Now let me ask some thing.

If she simply decides "the heck with it". what's the worst that will happen?
they can't touch her social security
Not sure if they can garnish her wages, if she has any and she has said she can't afford the loan?

I believe they can dock up to 15 % of the social security check.

http://www.smartmoney.com/borrow/st...financial-problem-college-debt-1344292084111/