 Dear
Dr. Don,
My parents are married and my mom co-signed numerous personal loans for my sister while she was in college. The loans totaled approximately $70,000, and my parents have since paid many of them off.
There are still some additional co-signed loans, owed by my sister, totaling approximately $30,000. Are both my
mom and dad responsible for this debt since they are married, or could just the co-signer be held responsible?
How could they hold my sister solely responsible for this debt? I have read that refinancing the loans is a possibility.
-- Vanessa Valor
 Dear
Vanessa,
If your mom co-signed the loans, then she is as responsible for their repayment as your sister. Late or missed
payments impact her credit history and credit score. Dad's responsible, too, (even if he didn't co-sign) if your
parents live in a community property state.
 |
| 9 community property states |
|
|
| 1. |
Arizona |
| 2. |
California |
| 3. |
Idaho |
| 4. |
Louisiana |
| 5. |
Nevada |
|
| 6. |
New Mexico |
| 7. |
Texas |
| 8. |
Washington |
| 9. |
Wisconsin |
|
If your parents don't live in one
of the nine community property states, your father
may not be legally responsible, and it won't show
on his credit report.
Refinancing the loans in just your sister's name is one way to get your parents out from under this obligation.
The other way is to pay off the loans. Other than that, there's no magic way for your mother to stop being obligated
to repay the loans. Lenders aren't likely to change the terms of an existing loan agreement to their detriment.
The Federal Trade Commission's
facts for consumers guide "Co-signing
a loan" is recommended reading prior to co-signing
a loan. Living with the decision after the fact
is just one of life's tribulations. Refinancing
will work if your sister has the credit score
to get these loans in her own name.
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