RELEASE, not SETTLEMENT
I have a wonderful tip for people who cosign student loans.
If you call and ask the loan people what they’ll settle for, they’ll offer a reduced principle payoff figure–around 10% off the number on the notices they send you–but they’ll tell you it goes on your credit report. That’s obviously a bad idea. Do not use the words “settle” or “settlement” when you contact the lender, because this is what they’ll try to foist off on you.
Here’s what you want: a cosigner RELEASE. Be sure you use that word.
It’s hard to believe, but it’s true. If you make them an offer they like–and this offer can be way lower than the settlement figure–they’ll execute a total release, and they won’t tell the credit bureaus. Try 50% of the principal and see what happens. You might save thousands. If you cosigned for a someone who has no character and no intention of paying, this may be the best way out.
Check it out, if you’re on the hook because you tried to do some fool a favor. It makes no sense whatsoever, but it works. You pay much less, your credit is unaffected, AND you can tell them to quit calling you and sending you letters. They’ll keep going after the debtor, but you’ll be in the clear.
Hope this helps somebody. It’s not legal advice; it’s just something I happened to learn.Stumble it! Save This Page