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Unique situation—-please help.

Total Posts: 1

Joined 2015-02-23

PM

 

Hello—I’ll keep my story/situation as brief as possible. I obtained 4x private student loans of roughly $30,000 a piece for school. Three of these were co-signed by my parents, one was co-signed by my older brother. The reason being that for some inexplicable reason the representative at the originator refused to let me parents co-sign my junior year loan. Anyhow, I graduated and like many others, realized I grossly over-borrowed from a predatory lender for an underpaying degree. I also quickly realized I had extremely little recourse despite the extraordinary circumstances I was facing. I deferred for as long as possible and was finally contacted by AES to start making payments when any deferral options had finally expired. They were asking for roughly 75% if my net income at the time, needless to say I was unable to meet the obligation. I filed for Chapter 13 protection and was given a 5 year judgement where I was still forced to pay roughly 30% of my net income as part of the case. I’ts important to note that my loan(s) never officially went into default before the filing. Now—-that 5 years is nearly up several months from now and this brings me to the crux of the issue. For reasons I won’t go into, it’s absolutely imperative that I absolve my brother from this loan entirely. There are various ways to do so but ideally I would like to settle his loan in as favorable of terms as possible with as minimal/zero negative effect to his credit rating as possible. Here are the several ways I can approach this situation once the loan comes out of Chapter 13 protection and is therefore able to be collected on.

1. I can approach the lender and ask for a co-signer release form. Any thoughts/considerations/advice for this route? This would seem like the ideal option since it absolves him of the co-signer obligation without any repercussions for his credit score/financial health.

2. I can attempt some sort of lump sum settlement (below the principle amount) for the loan in full. However—I believe any settlement/charge-off will result in a negative impact to his credit rating. Is this the case?

3. I can settle pay off the outstanding balance in full without any sort of settlement. But this requires the lender to agree to an early payment correct? Would this affect his credit rating in any way? I would like to avoid this route as much as possible since I will be forced to obtain the full amount from another party, but this will satisfy my main objective.

4. I can begin making monthly payments on his loan as requested by the service provider until the loan is paid off in full under the current terms and conditions of the loan. Again—-I would like to avoid this as well given the egregious interest rate on the loan, but it’s an option.


Now——regardless of which of the above (or newly suggested) steps I take, I’m still stuck with the other 3x loans. They are co-signed by my parents and I would like to avoid collection attempts on them. They are fully aware of the situation and have no assets to speak of. I am thinking of either re-filing Chapt. 13, defaulting on these and then hiring an attorney for a more preferable settlement/payment schedule, or working with the service company directly to work something out. The bottom line is——under no circumstances am I able to pay the monthly payments on all 4 loans, it’s not even feasible by any stretch.

Thank you for your time and any advice or thoughts would be greatly appreciated. To reiterate—-I HAVE to completely absolve my brother of this loan with as little collateral damage to his credit rating as possible. Thank you again.