Full question:
Ten years ago I co signed on a student loan. The loan officer is taking me to court on a civil judgement. Since then the owner of the loan has come forward and set up a payment plan to pay off the loan. But the loan officer still wants me to sign a paper stating that I will also make payments to this account or he will still file a civil judgement against me. Do I sign? I am afraid because that's how I got into this situation in the first place. HELP.
- Category: Debts and Credit
- Date:
- State: Texas
Answer:
If you're being asked to sign a payment plan agreement that includes a clause allowing the creditor to sue you if you default, keep in mind that the lender can likely sue you regardless of whether you sign the agreement. Typically, lenders will not agree to refrain from legal action unless the debt is fully paid off.
If you’re unsure about what you’re signing, ask the lender for clarification to ensure you understand the terms. Consulting a local attorney who can review your situation and documents is also advisable.
Once a judgment is obtained, the creditor may be less willing to negotiate a settlement and could place liens on your property or garnish your wages. Although it’s more challenging to negotiate after a suit has been filed, you may still be able to settle for a lesser amount if you can demonstrate financial hardship. In such cases, it’s beneficial to include a release in the agreement to prevent the creditor from pursuing the full balance of the debt claimed.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.