Many people believe that private student loans are treated the same as Federal student loans. This is not true. Unlike Federal loans, which are regulated by the Federal Government, Private loans are based entirely on the terms and conditions included with the Promissory Note you signed.
Many private student loan promissory notes contain an acceleration clause. An acceleration clause means that the entire loan defaults, and becomes completely due and payable when certain conditions are triggered.
This clause typically will lay out several reasons the lender can accelerate your loan. One of those reasons is usually if you or a co-signer files bankruptcy.
A typical scenario we see is that a borrower is making payments on their loan when the co-signer files bankruptcy. The lender then stops accepting payments and declares the loan in default. This can adversely impact the borrower’s credit even though they were doing what they were supposed to do. Many times, the co-signer doesn’t realize there will be a negative impact by the filing of a bankruptcy.
It may seem unfair and it is. It’s imperative when meeting with a Bankruptcy attorney to disclose all co-debtors you may have. Attorney’s typically get credit reports that may say Joint Account but have no idea who the co-signer is or how it can impact them.
If you have co-signers on your loans or you co-signed someone else’s loan and believe you need to file bankruptcy, discuss all the ramifications of your filing with qualified attorneys who understand the implications your actions will have on someone else.
Contact The Law Office of Andrew B. Finberg, LLC
To set up an appointment with an experienced attorney at The Law Office of Andrew B. Finberg, LLC, we have the experience you need and the help you can afford when considering a consumer or business bankruptcy filing. Contact our office online or call us at (856) 988-9055.