| ex wife and student loan debt |
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funnygirl
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| ex wife and student loan debt |
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First off, I am brand new to this forum . . . please let me know if this post is better suited to a different forum.
This might sound complicated so bear with me. My husband was previously married to a woman with horrible money management skills. Years ago when they were still married, they consolidated their student loan debt into one loan with both their names. I think the combined amount was around $40,000 as of 2002. When they got divorced in 2002, the ex bought my husband out of their house and he used the money to pay half the student loan. He made a verbal agreement with his ex that she would continue to pay down the rest. The bad part is that the student loan is STILL in both their names, which I think is just stupid, but I can't do anything about it. My husband says there is nothing they can do to change that and he and his ex knew that would be the case when they consolidated years ago. As long as the ex continued to make payments, there would be no problems.
Fast forward to November 2006. Suddenly we start getting invoices and phone calls from the loan company saying there hasn't been a payment made since 2002. I find this bizarre. My husband thought the ex wife had automatic payments taken from her paycheck. My husband refuses to pay because he's already paid $20,000 and his ex agreed to pay the rest. We've contacted her and she doesn't respond and/or won't call us back.
So here we have a mess. I'm so afraid of what this will do to his and our credit. I have a near perfect credit score, but his is not so hot. What are the consequences if someone doesn't pay? I wish the ex would refinance in her own name, but my husband is unwilling to push her to do that. Her financial skills are horrible and I know she's up to her neck in all kinds of debt, so she probably wouldn't be able to refinance anyway.
Does anyone have any advice on how I should protect my husband's and my money? Can the loan company freeze our bank accounts?
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Fri Nov 03, 2006 8:18 pm |
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Kiaser
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Ouch, there's no good outcome with this scenario.
A verbal agreement isn't going to do you any good. Even a written agreement, in this case, wouldn't help so much as the loan has both their names still on it. The proper way to have taken care of this is for the ex to have re-consolidated the entire loan (40k) in her name and then your husband to pay her the half he owes.
Their is nothing you're going to be able to do to get her to pay her side of the loan. In this scenario, even using legal force would be very expensive and I'd be confident to say nothing good would come of it. However, I'm not a lawyer and a small consultation visit to a lawyer might be something you should at least try.
It's a very very bad move to have had a verbal agreement with another on something like this. The ex knew exactly what she was doing but your husband also let himself be taken advantage of. The only option you have is for your husband to buck up and pay for the irresponsibility of what he got himself into. Also, even if he does pay it down the blemish of a credit collection or years worth of no payment is going to severely hurt his credit.
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Fri Nov 03, 2006 8:59 pm |
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funnygirl
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| Turns out, there's documentation . . . will that help? |
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In response to my post above . . . . turns out that somewhere in the separation/divorce agreement (which is a legal document) it is stated that the ex wife will make payments on the student loan. I thought the agreement was verbal and I was mistaken.
Would this give us any leverage with credit companies if and when this gets reported? Also, don't you find it odd that they wait four years to contact us about missed payments?
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Fri Nov 03, 2006 9:25 pm |
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Kiaser
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Cash: $ 43.05
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| Re: Turns out, there's documentation . . . will that help? |
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quote:
Originally posted by funnygirl
In response to my post above . . . . turns out that somewhere in the separation/divorce agreement (which is a legal document) it is stated that the ex wife will make payments on the student loan. I thought the agreement was verbal and I was mistaken.
Would this give us any leverage with credit companies if and when this gets reported? Also, don't you find it odd that they wait four years to contact us about missed payments?
Well that's a little better, but the credit companies aren't gonna care much about specifics like that. What could matter is that if she's held by contract to make the rest of the payments under legal document then there is also legal consequences set forth by the contract as well for not upholding her end of the bargain. What consequences, exactly, depend on the contract. Hopefully it's something that you can seek damages and resolution, but it would be from the ex (which will cost legal fee's to follow through with, not to mention that if she's a deadbeat you won't get anything out of her even if you win in court). Sadly, the credit companies will give a damn about the contract between your husband and his ex.
Also, it's not odd at all for the credit companies to start contacting you at such a long time after the loan payments stopped. The credit system is broken, and creditors have no obligation to contact you to let you know you have a debt that is not being paid correctly. This will go on and on until it's sold to a debt collection company (who pays the creditor for your debt and essentially buys your debt for a discount). The debt collection company will immediately destroy your credit as best they can and even levy heavy extra fees onto your debt. I've had a doctor do this to me once who never sent a bill to me after my insurance denied to pay him (I was covered under insurance, but my insurance company was giving him the regular run around to try to save cash at the cost of my credit). I didn't find out about it until three years later when it was sold to a debt collector and my credit got a nasty blemish (which I was fortunate enough to get taken off my credit after paying the debt and then writing my case to all three credit bureau's showing them proof of the inability for the doctor to properly contact me and inform me of my debt).
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Fri Nov 03, 2006 11:45 pm |
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Kiaser
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Cash: $ 43.05
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It may not work for you guys unless you can pay off the debt completely, but I just posted a topic in the forum about how I was able to remove a blemish off my credit a few years back. Maybe it'll help.
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Sat Nov 04, 2006 12:20 am |
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funnygirl
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| Thank you |
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Thank you. You've been very helpful and articulate in helping me see the big picture here. Now it's time for my husband and I to get down to business and start correcting this mess.
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Sat Nov 04, 2006 7:14 pm |
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