Rebecca Finch is faced with a situation that no one would want: she is about to lose her home. More than twenty years ago, she made the decision to financially support her daughter Sabrina (who needed money to finish her nursing degree). But now, this fact has become a real nightmare from which they do not know how to wake up.
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The dangers of loans.
It was 2004 when Rebecca’s daughter Sabrina began studying nursing. Her mother was very excited for her daughter, and she had observed how, for years, her daughter had been struggling in low-paying jobs to survive, so she decided to ask for a private student loan in 2007.
Sabrina asked for $17,600 to complete her nursing degree, with her mother as co-signer, both of them believing it was a very good investment. But, life had other plans in store for them. Sabrina, now 53 years old (she was 30 at the time of the events) suffered severe mental health problems (bipolar disorder) that left her unable to work and therefore unable to service the debt. At the time, Navient cancelled the debt to Sabrina (only her) on the grounds of disability, but all responsibility fell on her mother Rebecca because she had been the co-signer.
What is a co-signer?
A co-signer, or guarantor, is a person who agrees to support the payment that another person requests. This means that the person signing agrees to take full responsibility for the payment in the event that the main person who has requested the payment or service is unable to meet the payment.
So what happens now?
Rebecca is now 85 years old and has several health problems, including the loss of cognitive ability as a result of several strokes. She receives a monthly pension of $1,650 and faces a debt of more than $31,000 in variable interest. Her mortgage expenses consume a large part of her income, leaving her with a margin to cover the monthly loan payment of $312.
Now the fear is much greater because they could take her house to pay the debt, a small house built in the 1950s in Virginia could be seized if she fails to pay the debt.
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For Navient’s part, they are clinging to the legality and will not back down, Paul Hartwick confirmed that the co-signers are responsible for the payments in case the main borrower cannot make the payments.
What about private student loans?
They are typically known for their harsh terms and lack of protection for borrowers. They differ from state loans because they do not offer alternatives in the event of disability or death, however, the industry for these loans continues to rise since 2019 (because applications also continue to rise). However, 90% of applications asking to release co-signers are rejected. Collection techniques are quite aggressive and it is very difficult to get out of the loan, Anna Anderson, an attorney at the National Consumer Law Center, has seen everything from wage garnishments to account freezes, these are situations that can destroy homes.
Sabrina’s ongoing struggle
Sabrina has tried to find solutions, even applying for her mother’s disability pension, but Navient continues to put pressure on Rebecca to make the payments, and her biggest fear is that Navient wants to collect the debt through Rebecca’s home, a house that isn’t much but “it’s all she has” says Sabrina about her mother. We’ll have to wait to see what solutions are offered to this mother and daughter who have shown themselves insolvent and unable to meet the debt (since they both receive disability pensions).
This case is one of thousands of cases of people who have signed a loan without really being aware of the consequences that this has in the future. For those who are already trapped in this situation, organizations such as the Education Debt Consumer Assistance Program (EDCAP) can offer crucial support to guide them on how to act.
Nguồn: https://marketeconomy.monster
Danh mục: News