Family Matters
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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
If you have questions about this, please email help@theknot.com.
Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
RP from Money Matters: Co-signed loan with parent?
My DH co-signed a college loan ten years ago with his mother in the amount of 5K. It sounds like my DH agreed to pay off the loan by giving money to his mother and she would make the payment. At one point, it was down to 3K. Fast forward to this year... my DH runs a credit report on himself and discovers this loan is still out there and now the balance is 7K. I'm so annoyed and really frustrated because my DH dropped the ball and for whatever reason, just stopped making payments. It seems like he just let it slip under the radar and thought it was being taken care of - wrong!!! Beside that, my MIL increased the credit amount when it wasn't her loan to begin with and she's been late making payments! So now his credit is messed up. Just curious how you would handle this situation.
Re: RP from Money Matters: Co-signed loan with parent?
I'd handle it by ignoring MILs part in this (since your DH was the one responsible for paying so she didn't really have a part), paying the whole bill out of savings, and making sure DH got a second job or picked up a ton of overtime to replace our savings.
And, she may not have been the one to increase the credit amount---if it was a traditional student loan, the amount likely went up due to interest and penalties. If it was a line of credit, sometimes banks and credit card companies just increase those without your input. I know that my credit card companies have increased my limit from time to time without me asking them to.
Thanks for the advice so far! I should add that my DH has every intention of paying back the loan. He asked his mother what happened and she admitted she increased the credit line. He asked her to give him all the loan documentation so he could start paying it off. He also wants her removed from the loan. She told him she would "look into it" and now it's been a couple of months! I don't know why they wouldn't have set it up so that my DH could just pay it directly. My MIL is very controlling and finds meaning in her life by taking over and doing things for other people that they can do for themselves.
Since DH's name is on the loan, he can contact them directly. He doesn't have to have her "look into it" because it seems like she's dragging her feet. Did she say why she increased the credit limit?
If I were in your shoes, I would make sure my husband and I took this over because your finances and credit are way too important to put the ball in someone else's court.
What does that mean? Did she increase the line of credit or did she take out a bigger loan? And if she took out a bigger loan, was it for his education or was it for herself?
And what happened to the money he gave her that was supposed to be paying off this loan? Did she keep it or use it to pay down the loan, like she said?
Considering she ran up his debt and screwed up his credit, I say she needs to get fired as his life coach.
Agreed. I would also try to write as many checks as possible to just the principle on top of your monthly payments (if you can, without stressing out your other financial obligations).