Fed Financial
How does bankruptcy affect private student loans?
Hi, I have about $40,000 in student loans through a private bank, not federal. I know that federal loans cannot be discharged in bankruptcy and from what I've read, private loans CAN be... However, my parents are the cosigners on the loans (they are still deferred as I'm still in college) and A)I don't want my parents to know my hubby and I are filling bankruptcy and B) I still plan on paying back the student loans myself, and don't want them to default against my parents... It's just the credit cards and T-mobile ($200/mth for a $99/mth plan?? stupid fees and WAY TOO HIGH early termination fee, over $500!!!) that are too much for us now after hubby lost his job. If I reaffirm the student loans, will my parents even know about this? We have at best a... strained relationship... and my parents charge me "interest" of their own for the loans as they didn't want me, a girl, to go into engineering... Anyway, thanks for the input! Trust me, I've research ALOT about bankruptcy,and even talked to a couple of different lawyers about it, both of which said we really need to file. We've got about $26,000 in credit cards combined, (most of that is from tuition, books, lab fees, gas, etc). Also, if I don't list the student loans in my bankruptcy filing (I still don't have to pay ANYTHING on them for another 2-3 years) how would that even affect my parents at all? And they only cosigned for me because the rest of the world twisted their arm into it... I'm going to end up with about 15% interest on my student loans by the time my parents are done with me... Hubby recently got a job in foodservice, that's how poor the job market is around here, but work is work so he does it with a smile. Still, some situations are unavoidable, especially in this recessive market. SO... If I don't list the student loans and/or reaffirm the debt, how would that affect my parents at all? I'D still be the one paying, not my parents.
Public Comments
- Bankruptcy is not a good way to go. Your parents are going to find out sooner or later, so tell them what the problem is - perhaps to not take husband on this visit. They're in a much better position to help you assess your options - life experience is valuable.They co-signed on your loans so will definitely be on the hook and bankruptcy isn't going to save them from this debt. OK so they get upset - you would, too. Suck it up and take it like an adult. Get a handle on your spending habits and stop using the plastic. I agree one's parents shouldn't perhaps charge their own kid interest, but if it's a low rate, then it's better than what you could have gotten at a bank. (My dad used to try to charge me 12%/year - the operative word here is TRY. It never quite worked and I recalculated everything at about half that.) As for the cell phone, why are you spending $200/mo or even $99? Renegotiate with the carrier to the $20 or $30/mo plan and stop using it for every breath you take. There are still land lines FYI. Sorry the parents have such attitude about your choice of career. It's now up to you to prove them wrong and get a handle on your finances. If the husband doesn't know how to do finances, you may need to reconsider your choice of mate.
- It will show up on their credit reports too. Hubby should be getting another job today and the get a night job just to make sure your parents credit is NOT destroyed no matter how strained the relationship is. They did you a big favor by co-signing do not repay them by ruining their credit too.
