MOm wants dead son's student loans forgiven

[disykat]

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

Exactly. Your dad had to pay off the card that was a joint one because he had joint responsibility. The person who co-signs OWNS that loan. If the mom in this case hadn't co-signed, she wouldn't be obligated - but she signed an agreement to pay the loan if he couldn't.

Since there's no product to return or sell to get some money back, like in the case of the joint credit card return, it has to be paid off the hard way.

 

[joviroxx]

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

.

I would love to discuss this but the thread would become way political and against board rules.

 

[robinb]

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

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

Those are federal student loans. I believe the "student loan" in question is a glorified signature loan. They cannot touch her social security or other federal benefits (like VA). In some states they cannot touch her house. In others they can get a judgment for the amount and slap a lien on the house to get their $$ out when it is sold.

 

[trip]

The Federal student were probably forgiven because most likely they were only in his name. It's the private loan that is the problem. Suze Orman hates private loans as much as she hates people co-signing loans, any loans!

http://www.forbes.com/sites/jennago...ey-mistakes-private-student-loan-cosign-debt/

Take note of mistakes number 1 & 2.

 

[trip]

Those are federal student loans. I believe the "student loan" in question is a glorified signature loan. They cannot touch her social security or other federal benefits (like VA). In some states they cannot touch her house. In others they can get a judgment for the amount and slap a lien on the house to get their $$ out when it is sold.

True I missed that. But it will sure ruin her credit.

 

[joviroxx]

Those are federal student loans. I believe the "student loan" in question is a glorified signature loan. They cannot touch her social security or other federal benefits (like VA). In some states they cannot touch her house. In others they can get a judgment for the amount and slap a lien on the house to get their $$ out when it is sold.

And at least here in Florida, they can force the sale of a home to collect on a lien placed. It doesn't happen often, but it can happen

 

[beaucoup]

A very small life insurance policy to cover his debts would have been so inexpensive. Especially at his young age. Too bad.

 

[Bilberry]

This is a special situation, with the sad passing of the mothers son - I think though in the future forgiving or bailing out student loans is something we are going to be hearing more and more.

Saw that Investors.com had an article on the likely hood of a future college debt bailout.

"Will College Debt Bubble Lead To A Bailout?"

http://news.investors.com/ibd-edito...er-looms-as-student-debt-nears-1-trillion.htm

Overall, University education needs to become less expensive. One of the bigger problems for the high costs is administration bloat, along with easy money for young students to go into debt.

"Deans, Deans Everywhere…and No Professors to Teach"

http://blogs.the-american-interest....-deans-everywhere-and-no-professors-to-teach/

snippet:

...Purdue’s president has defended the administrative growth, arguing that new administrators are needed to keep up with grants and to market the school to out-of-state students, who pay twice the amount as in-state residents. Witness the relentless, circular logic inflating the higher ed bubble: We need to raise tuition in order to pay top-dollar for marketing gurus who will lure in more out-of-state students who pay higher tuition rates.
The good news, however, is that this cannot last. One thing to remember: much of the college executive bloat is the direct result of an ever increasing government presence in and regulation of American higher education. Smaller administrations more closely focused on supporting teaching and real research: moving in that direction would help more colleges and universities become, as they like to say on campus, “sustainable.”

 

[eliza61]

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.

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

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

That's so interesting, I wonder why it never happens. As I said they now have website where you can go get help in NOT paying off your mortgage and as I said I know folks who simply walked away from their school loans and after a few years had no problem obtaining other credit.
Now mom in this story is in her 60's so I doubt if they go after her ss and in probably 10 years she won't give a hoot.
End result: bank is out of 10K.

True I missed that. But it will sure ruin her credit.

at her age, would it matter?

 

[eliza61]

This is a special situation, with the sad passing of the mothers son - I think though in the future forgiving or bailing out student loans is something we are going to be hearing more and more.

Saw that Investors.com had an article on the likely hood of a future college debt bailout.

"Will College Debt Bubble Lead To A Bailout?"

http://news.investors.com/ibd-edito...er-looms-as-student-debt-nears-1-trillion.htm

Overall, University education needs to become less expensive. One of the bigger problems for the high costs is administration bloat, along with easy money for young students to go into debt.

"Deans, Deans Everywhere…and No Professors to Teach"

http://blogs.the-american-interest....-deans-everywhere-and-no-professors-to-teach/

snippet:

I really belive that Bilberry. we are seeing it now, where kids are coming out with 50, 60K in debt. they know they can't pay it off so after 5, 6 years they stop paying. Yes they are aware it never leaves their credit report but here in South jersey car dealers literally advertise that bad credit is not a problem and there always seems to be some one ready to loan money.

So I do think just like the mortgage melt down, in 10 years we are going to have the banks and the feds holding a whole stack of notes that are simply not getting paid.

 

[Anjelica]

I may have missed this but was this a "big bank" loan? The answer doesn't change my opinion that she should pay I was just curious.

I know folks like to vilify financial organizations but there are still small banks around - these are banks that cannot rely on falling back on their huge customer base when folks cannot pay back loans, etc.

 

[Arielle22]

Wages can be garnished if there is a court order. I have seen it happen while working in HR.

I am of the opinion that she was a co-signer so she owes the money. She may not have gotten use of the money but her son did. Her family situation should not concern the bank.

To the posters who say the banks need to judge who is credit worthy, I don't know any traditional college student who could afford loans if the criteria was tightened up and a cosigner couldn't be used (since most don't work or work a few hours a week). So should those students be penalized due to others who pay attention to what they sign?

 

[eliza61]

I may have missed this but was this a "big bank" loan? The answer doesn't change my opinion that she should pay I was just curious.

I know folks like to vilify financial organizations but there are still small banks around - these are banks that cannot rely on falling back on their huge customer base when folks cannot pay back loans, etc.

I know I don't like to vilify anyone. I actually think it's a symbiotic relationship.
NO one wins if a student defaults on their loans or even if a home owner defaults on it's mortgage.
So I'm not one to simply say banks don't need to care or they aren't in the business of making sure you've read the fine print.

I think I'm a halfway bright individual and I can remember how intimidating "loan-ese" can be. I do know at 18 my son who is a freshman at university of cincinnati could not tell you one aspect of his loan. Not one. and we sat down and explained it to him. I'm willing to bet that 1/2 billion dollar powerball ticket that if you asked him today he could not tell you the repayment terms.
Now "ifa, woulda, shoulda" are all good and well on paper but as Bilberry posted, in a few years, a whole bunch of banks are going to collapse under the weight of all those unpaid notes and big banks will do what they always do. Head to the feds for a bail out and claim you have to save us.

Translation: we're on the hook. So IMO, since it's going to directly affect (or is it effect) the colleges, the taxpayer and the institution, shouldn't all three have a bit of responsibility?

Now like I said, I'm willing to bet if statistic hold up.
1) Mom will not pay off that note
2) will not have her wages or ss garnished
3) bank will write it off.

 

[eliza61]

Wages can be garnished if there is a court order. I have seen it happen while working in HR.

I am of the opinion that she was a co-signer so she owes the money. She may not have gotten use of the money but her son did. Her family situation should not concern the bank.

To the posters who say the banks need to judge who is credit worthy, I don't know any traditional college student who could afford loans if the criteria was tightened up and a cosigner couldn't be used (since most don't work or work a few hours a week). So should those students be penalized due to others who pay attention to what they sign?

How did that theory work out during the mortgage crisis?

Did people who paid attention to their mortgages and how much they could afford end up getting penalized? Yep. When they used tax payers money to bail out the banks from those risky loans, you and I officially got penalized.

How did it work out during the credit card crisis?

When the banks where giving out cc cards to students (who they knew had zero interest. my sons got tons of credit card) and unemployed folks. what happen to the interest rates on those who paid their bills on time but may not have had absolutely perfect credit scores?
The cost of borrowing went up for quite a few folks.

To think these things work in some type of isolation chamber is dangerous.

And guys I'm not talking for banks to sit down and go microscopic, line by line with a person but let's say in this womens case the bank (if it was a bank) said to son, since you need a cosigner we're going to require you take out loan insurance (like the type you get on a cc). what would that have cost him? an extra 50 bucks?

 

[Sonya Lee]

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.

I have no idea what this winkie smilie is supposed to mean. We happen to have the house in my husband's name, as well as all the cars because I have the possibility of being sued personally due to my profession so it's prudent to keep things out of my name. I'm not sure what "type of girl" that makes me other than a professional who is protecting her assets.

 

[tasha99]

Unfortunately, student loans are the only loans I know that you cannot get out of even in death. People should watch the CNBC investigative report "The High price of Admission". The is an in depth look at what it takes to get a loan and what happens in the case of a child dying.

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.

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.And yes, she is credit worthy - has had car loan, credit card, etc.

This is interesting. I went to college at the ripe old age of 16, and the bank asked my parents to cosign for me. My dad refused, and they gave me the loan as a minor because government student loans and financial aid don't require any sort of credit. My 20 year old daughter has been able to get student loans now, so I know that hasn't changed (she has no credit history whatsoever).

 

[joviroxx]

I have no idea what this winkie smilie is supposed to mean. We happen to have the house in my husband's name, as well as all the cars because I have the possibility of being sued personally due to my profession so it's prudent to keep things out of my name. I'm not sure what "type of girl" that makes me other than a professional who is protecting her assets.

If you live in a community state, like here in Florida, BOTH name MUST be on the title/deed. The mortgage can be in only one name but the ownership MUST be in both names.

 

[westjones]

I feel for the woman, but the bank isn't doing anything wrong. She took out a loan when she co-signed....as far as the bank is concerned, one of the signers is going to pay it back and they don't care which one. But that is why they want co-signers....to reduce their risk.

Now I will say, that it would be nice if maybe banks started suggesting life insurance policies or even offering some sort of policy that could be purchased when they loan is taken out. Something that many people might not think about, but it if were suggested or offered up front they may do to avoid this situation.

 

[Sonya Lee]

If you live in a community state, like here in Florida, BOTH name MUST be on the title/deed. The mortgage can be in only one name but the ownership MUST be in both names.

Untrue where I live. Community property does not require this. In the case of divorce, marital assets are divided equitably regardless of whose name is on the deed. Assets owned before marriage can be considered personal property and remain the property of the owner. You may transfer ownership into the community property if you desire but it is not required.

It is common place to do what we have done. I don't know about Florida although it appears a married person can hold sole ownership. I don't have enough posts to post a link

______________________________________


Types of property ownership in Florida



Written by Matt Bales | 17 March 2010
Prior to closing, a homebuyer who is purchasing property in Florida must consider numerous matters. One extremely important matter, which is often not given enough consideration, is determining how to "take title" to the property. In other words, many types of property ownership exist, each with unique benefits and drawbacks.
Factors such as asset protection, taxation and estate planning-needs must be considered before choosing the best way to take title to the property. Various ways in which a buyer of a Florida home may take title to property are described here.

Single ownership:
Title to real property can be taken in a person’s own name, which is generally referred to as sole ownership. Unmarried persons, legally divorced persons and married persons who wish to hold the property in their own names may use this form of ownership.However if a married person takes title in his or her own name, at the time he or she resells the property his or her spouse will have to relinquish his or her rights to the property due to Florida’s homestead laws.

A person can also take title to the property in the name of a living trust, which is commonly known as a revocable inter vivos trust.

Joint ownership:
If a person is purchasing the Florida property with other persons, they can take title to the property as Tenants in Common. As Tenants in Common each joint owner of the property has the right to sell, lease or bequeath their interest in the property to his or her legal heirs. In Tenancy in Common, any number of individuals can hold title to their respective share of the property, depending on their contributions.
A person purchasing the Florida property with other persons can also take title to the property as Joint Tenants with the right of survivorship. Under Joint Tenancy all joint tenants have equal possession rights to their respective share in the property. In addition, due to the right of survivorship which is not present in Tenancies in Common, when a joint tenant dies, by operation of law his or her share is automatically distributed among the remaining joint tenants. There are no restrictions on the number of persons that can be joint tenants under a Joint Tenancy.

Similar to Joint Tenancies is the Tenancy by the Entirety, which is for married couples who wish to hold a joint title in the name of both spouse. Under a Tenancy by the Entirety the property is equally held in the name of both the husband and wife. This title is applicable and available for married couples only. Both the husband and wife have equal possession rights to the property and similar to a Joint Tenancy, when one spouse dies, his or her share is automatically distributed to the surviving spouse.

 

[trip]

But it will sure ruin her credit.

at her age, would it matter?

I'm in my 60's and I like to have great credit! I plan on being around for another for another 20-25 years.