Considering Chapter 7 but scared for my Co-signers.

[yunnie]

I read only the first page of this thread and already I'm freaking out. I was considering filing bankruptcy because I'm currently being sued by a credit card company and didnt want them garnishing my wages (if I ever get a job soon) or getting my $150 I have in my bank account.

I wasnt worried until I found out that you have to list student loans on the forms even if you intend to keep them. After reading what everyone else has been through - having their student loans charged off and the Co-signer left as the solo name on the loan, I'm considering not filing now. I dont want that to happen to either of my Co-signers (my parents), screwing up their credit score and all. I think I might let SOL run its course now.

Oh I really dont know what to do now.

[KeithDoxen]

The reality is that private student lenders can and often do default your loan upon bankruptcy. Most private student loan contracts include such a provision and the lender will often put you into default in order to get paid by the guarantor in full, so that the guarantor now has deal with trying to get you to pay. I guess they assume that if you're bankrupt, you're not going to be able to continue to make monthly payments, even though that doesn't really make a lot of sense. It's really a game of pass the buck at this point, i.e., the bank who lent the money wants to pass the loan off to the guarantor, who will then see your cosigners as low hanging fruit and will try to pass your debt onto them, essentially, by suing them instead of you.

No guarantee this will happen, but it very well could. I used to tell people that it depends on the lender, but now it seems that it depends on your situation. If they see that you have cosigners, they might assume those cosigners have lots of neat stuff that they can take to satisfy a judgment, and so they might use the bankruptcy as an opportunity to default you and sue your parents, and thus get paid in full for the loan. It's really a judgment call at this point. You could call them and ask, but you'll likely speak to a nameless representative who will have no clue what the lender's policies are in this regard.