Credit problems

[Bailey22]

My mom is a co-signer for one of my student loans. She just recently filed bankruptcy, and now it is showing up on my credit that the loan is in bankruptcy. I've read that this is an error, but I've tried everything and I can't get it taken care of.

My mom talked to her lawyer who said that it should not have happened. They aren't realizing that I am still able to pay for the debt. I have talked to the loan company and all they say is that I need a letter from the court discharging it from bankruptcy. They aren't listening that it's not ME who filed the bankruptcy. I've disputed it with all 3 major credit reporting agencies and none of them get changed. They say they spoke with the loan company who is still reporting it as in bankruptcy. I've told them about the situation and they continue to say it doesn't matter because it's all the same loan.

I'm going around and around in circles here about to pull my hair out. To top things off, my mom's lawyer is horrible at returning calls. It takes me weeks just to get a hold of him and he keeps telling me to call this person and that, and nothing is getting taken care of. What do I do???

[MajorMike]

If you're mom is a co-signer, I believe you're liable. Authorized User is different but you share the loan and it's part of the BK.

[phoenyx]

My mom is a co-signer for one of my student loans. She just recently filed bankruptcy, and now it is showing up on my credit that the loan is in bankruptcy. I've read that this is an error, but I've tried everything and I can't get it taken care of.

My mom talked to her lawyer who said that it should not have happened. They aren't realizing that I am still able to pay for the debt. I have talked to the loan company and all they say is that I need a letter from the court discharging it from bankruptcy. They aren't listening that it's not ME who filed the bankruptcy. I've disputed it with all 3 major credit reporting agencies and none of them get changed. They say they spoke with the loan company who is still reporting it as in bankruptcy. I've told them about the situation and they continue to say it doesn't matter because it's all the same loan.

I'm going around and around in circles here about to pull my hair out. To top things off, my mom's lawyer is horrible at returning calls. It takes me weeks just to get a hold of him and he keeps telling me to call this person and that, and nothing is getting taken care of. What do I do???

I don't know whether this is being reported correctly or not. It doesn't seem right to me, but then again credit reporting laws and regulations aren't always right...

Have you asked to speak to a supervisor at the loan company? Keep asking for someone higher up, explaining that it's your loan, and that you're paying it back and have nothing to do with the bankruptcy, and that you don't want your credit report harmed when you are continuing to make payments and aren't going through a bankruptcy.

I'd recommend asking to speak to a supervisor at the credit bureaus also.

I definately don't have experience with this type of situation, but I'd suggest keep going for someone higher up and appealing decisions until you get somewhere. Definately the first time I've read about a reverse co-signer issue. Usually it's the other way around when someone gets hurt due to a co-signer.

It might benefit getting a lawyer of your own to fight this. If you talk to a bunch in your area, you could explain the situation, and ask for an estimate of how much they would charge to start fighting this for you. You might find an estimate that wasn't awful, and even better, you might get some good advice out of some initial consultations that you could act upon yourself.


If nothing else works, you are allowed to put a 100 character statement (200 in Maine I think) on to your credit report. You could write up something in there very clearly explaining that your co-signer filed the bankruptcy, that you didn't, and that you've never been late (if true) on the loan and are still paying. If you apply for credit, you could give a statement to them explaining the situation, and hope they can look past the original results a bit.

[Bailey22]

Yes I have talked to supervisors but I don't get anywhere with them. They say it doesn't matter who filed the bankruptcy on the loan. It's just the fact that the loan is in bankruptcy and that's all they seem to look at. And I'm not paying on the loan anymore. My parent's didn't even tell me they had filed for bankruptcy. I found out because all of a sudden my account was locked and I was unable to make my payments online as usual. I called and they told me it was because it was involved in bankruptcy.

I have been trying to speak to a lawyer. My parent's lawyer won't call me back. I've also been in touch with my sister's lawyer (she filed bankruptcy too) and I get the same message every time I call.."He's in court today."

[phoenyx]

Yes I have talked to supervisors but I don't get anywhere with them. They say it doesn't matter who filed the bankruptcy on the loan. It's just the fact that the loan is in bankruptcy and that's all they seem to look at. And I'm not paying on the loan anymore. My parent's didn't even tell me they had filed for bankruptcy. I found out because all of a sudden my account was locked and I was unable to make my payments online as usual. I called and they told me it was because it was involved in bankruptcy.

I have been trying to speak to a lawyer. My parent's lawyer won't call me back. I've also been in touch with my sister's lawyer (she filed bankruptcy too) and I get the same message every time I call.."He's in court today."

You might be able to still mail in payments and have them accepted, so you don't start getting delinquent (or continue being delinquent) on the account.

Might be time to look for an attorney who is more responsive, I can imagine how frustrating it must be to not get responses in a timely manner.

Time is definately of the essence. If the account becomes delinquent since you haven't been making payments, this will trigger worse problems for you, such as negative items on your credit report, possible late fees, possible interest rate increases, etc, etc.

[Bailey22]

But it doesn't state my account as delinquent. It is locked. Apparently since my parents included it in their bankruptcy, it is being paid for as part of their monthly payment? At least that's how I understand it.

[woeisme]

We are also having trouble with our student loans because of our CH 13 BK. We never missed a payment, because the trustee allowed us to include the $325 monthly payment in our budget, but the student loan co. locked our account as well because of the BK filing, and declared it defaulted and the guarantee agency paid it off and now it shows as defaulted! And we never missed a payment! I talked to the guarantee agency, and they said we could make payments during the 5 years of BK, but that any payment would be voluntary because requiring payment would be a violation of the automatic stay. I think that's the real issue, that they can't require payments, so are afraid they'll get stiffed so report it as negative no matter what, and in our case as defaulted, which we are concerned with because maybe they'll try to go after our tax returns now? Anyhow, the loan is not being paid through the BK, but outside the plan, so I wouldn't be so sure that your parent's BK is paying on yours. You need to have them check who the trustee is distributing payments to, either using PACER or the CH 13 datacenter or something equivalent, because if it isn't getting paid, not only is it going to show as included in BK on your credit, it's also going to show late/non-payments pretty soon and then defaulted, which looks REALLY bad on the credit report.

[Flamingo]

My mom is a co-signer for one of my student loans. She just recently filed bankruptcy, and now it is showing up on my credit that the loan is in bankruptcy. I've read that this is an error, but I've tried everything and I can't get it taken care of.

My mom talked to her lawyer who said that it should not have happened. They aren't realizing that I am still able to pay for the debt. I have talked to the loan company and all they say is that I need a letter from the court discharging it from bankruptcy. They aren't listening that it's not ME who filed the bankruptcy. I've disputed it with all 3 major credit reporting agencies and none of them get changed. They say they spoke with the loan company who is still reporting it as in bankruptcy. I've told them about the situation and they continue to say it doesn't matter because it's all the same loan.

I'm going around and around in circles here about to pull my hair out. To top things off, my mom's lawyer is horrible at returning calls. It takes me weeks just to get a hold of him and he keeps telling me to call this person and that, and nothing is getting taken care of. What do I do???

Because your mother is a co-signer on your loan, the loan has been appearing since its inception on her credit reports along with yours. Then your mother filed Bankruptcy. She had to report the debt to the Trustee because she is a co-signer. So, therefore, the lender was advised of the filing along with all other creditors. It is a part of her filing even though it is not dischargeable in her bankruptcy and even though you are making the payments; however, since your name is on the account, your credit reports are affected. That is the danger of co-signing. However, there was a recent class action that is either still in progress or settled by people in your situation in bankruptcy filings having another person's bankruptcy appearing on their credit reports even though they did not file the bankruptcy. I don't know if this involves co-signers or just authorized users. In any event, you need to contact your mother's attorney to see what, if anything, can be done to have that information cleared from your reports. Best of luck to you.

[kornellred]

This situation has got me a bit worried - I am filing for Chapter 13 BK in a few more weeks and I am a co-signer on my youngest son's car loan. He is only 19 and does not have much of a credit history - the thought of tarnishing his credit standing so early in the game is not pleasant...

None of my credit reports indicate the loan that I am a co-signer on.

Time to roust my attorney and see what's what.

WR

[keepmine]

Here's the classaction settlement Flamingo mentioned. It is one hell of a long read. I copy and pasted the bottom line.
I'd suggest looking for a lawyer on the www.myfaircredit.com site.
This site has a tremendous amount of caselaw and other references to credit reporting and debt collection. Well worth a look if you have an interest in that stuff.

http://www.myfaircredit.com/forum/viewtopic.php?p=893&sid=c4e0c89102d94780f173b43426e926f1

As noted in the Order entered October 2, 2003, the Original Stipulation allowed Defendant to retain the references to bankruptcy so long as it included qualifying language to indicate that the bankruptcy was "of another." [FN47] Most or all of the Objectors argued that elimination of the reference altogether was not only their preferred prospective relief, but that any other modification of Defendant's prior practice in the reporting of the bankruptcy of another was inadequate. They, therefore, challenged the Original Stipulation to the extent it allowed Defendant to continue the use of a reference to bankruptcy, albeit qualified as "of another." While the court made no findings as to whether this alternative satisfied the applicable standards, it did find the record inadequate to resolve the issue.

FN47. At the time of the September 23, 2003 hearing, Defendants in two of the three related actions had implemented procedures which eliminated the reference to bankruptcy altogether. Experian fell within this group. Defendants in the third action, Equifax, Inc., and Equifax Credit Information Services, Inc., (collectively "Equifax"), opted to retain the bankruptcy reference together with clarifying language. While
only Equifax initially adopted this "fix," this option remained open to all Defendants under the terms of the Original Stipulations.

Under the terms of the Second Modified Stipulation, Defendant shall, no later than May 31, 2004, permanently cease making reference to the bankruptcy of a third party, with or without qualification. The court finds the delay to be necessary to allow implementation of this modification by Defendants in a related action (Equifax). See supra n. 47. As to the Defendant in the present action (Experian), the delay has no practical effect. [FN48] As this change results in Defendant ultimately and permanently adopting the procedure preferred by all of the Objectors and as this procedure will, if properly implemented, eliminate the complained-of bankruptcy reference in its entirety, the court finds this modification to moot the court's prior statement of concerns with the fix which allowed for the reporting of a Joint Account holder's bankruptcy if clarified as the bankruptcy "of another." [FN49]


As I understand it, if they chose to report a non filing cosigner, the must make it clear that the cosigner did not file bk.

[lrprn]

Welcome to the black hole of student loans in Ch 13. The law doesn't allow discharge of the loans but made no mention of what to do with student loans when the loan owner or co-owner files Ch 13 for 3-5 years. The student loan lenders typically put the loans in forebearance or deferment all the while charging interest that mounts for years while no payments are made. It's a mess.

You can still make voluntary payments on your student loans if you wish even if your parents filed - we are. Find out how and where to send payments. Many lenders will shift off loans in deferment because of Ch 13 to a second-party company to manage the loans. Find out if this is what happened to your student loans when your parents filed.

Don't give up. Keep going up the line to at least get voluntary payments started again.

And lastly contact your congresspersons in writing. They need to be aware of this student loans in Ch 13 mess and others that the 2005 Congress created passing this very badly written bk law. Good luck - keep us posted about what happens, ok?

[Bailey22]

I just checked my credit report and it says there is a payment plan for the loan. I'm thankful that it's not defaulted or anything, but I'm still going to contact them to make sure it isn't headed there.

Thank you keepmine for the myfaircredit.com. I have submitted a form for a lawyer to contact me, and it is for free which is perfect. Every lawyer that I've contacted either won't call me back or wants a $250 consultation fee, just to ask a question.

I'm a little confused though. So should this be reported on my credit or not? Is it an actual reporting error or is this something I'm gonna have to deal with? I had plans to do home improvement and such this year and I'm scared to have my credit checked with this on there because I probably won't get a very good interest rate...and it's not even my fault...

[$$only4ever]

We also co-signed on my son's student loan with Sallie Mae. He is listed as the primary borrower; DH is the secondary borrower. Sallie Mae tried to report my son as being in bankruptcy. Wrong. He did not file bankrutpcy, therefore the word "bankruptcy" cannot appear on his credit report. It cannot even say "Included in bankruptcy because he did not file.It would be incorrect reporting I disputed with them and won. All it says on his credit report now is that it is deferred, which it is with an administrative forebearance. Contact your lender and tell them you want any incorrect reporting removed. Also, file a dispute with the credit reporting agency to remove the incorrect information.

[Bailey22]

How were you able to dispute it and win? I disputed it with all 3 credit reporting agencies but they all came back that SallieMae was reporting it as involved in bankruptcy. I've contacted SallieMae several times and they won't even talk to me. I try to tell them the situation and all they say is that it doesn't matter WHO filed the bankruptcy, just that the account itself is involved. They wouldn't hardly give me the time of day.

So now, thanks to myfaircredit.com, I found a lawyer that is willing to take my case, even though he is in Washington and I am in Missouri. He said there is a SallieMae branch there that he has sued before for the same thing. They are very bad with reporting. Apparently companies used to not be able to separate different borrowers on a loan. But in 1997 that was supposed to be changed to where they can separate me and my mom's credit. Well SallieMae hasn't stopped reporting incorrectly. So my lawyer is filing a suit against them and he said he's hoping to get it removed from my credit, have his fees paid for, and $2000 in damages to me. I'm thankful to finally have somebody paying attention to me, and hopefully this will get taken care of soon so I can move on with my life.

We also co-signed on my son's student loan with Sallie Mae. He is listed as the primary borrower; DH is the secondary borrower. Sallie Mae tried to report my son as being in bankruptcy. Wrong. He did not file bankrutpcy, therefore the word "bankruptcy" cannot appear on his credit report. It cannot even say "Included in bankruptcy because he did not file.It would be incorrect reporting I disputed with them and won. All it says on his credit report now is that it is deferred, which it is with an administrative forebearance. Contact your lender and tell them you want any incorrect reporting removed. Also, file a dispute with the credit reporting agency to remove the incorrect information.

[keepmine]

I'm glad you found some help. It's a shame you have to sue to get a blatant error corrected. Keep us posted.