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Co-signing loans is just never a good idea

By HELEN HUNTLEY
Published June 27, 2006

I co-signed for a student loan for my daughter with the understanding that she would help pay some of the amount owed. It has been four years, and she still hasn't paid anything. Do I have any recourse, since this is becoming a financial disability for my wife and me?

This is a textbook example of why co-signing loans is a bad idea.

Because you co-signed, you are on the hook for the loan regardless of what your daughter does. If you don't pay, both your credit and hers will be damaged.

I suggest that you ask a third party to mediate this issue with your daughter. That person might be a counselor, one of your other children or another relative.

The "understanding" that she "help" repay the loan should be reduced to a formal payment schedule that both of you find acceptable. There also are professional mediators who do this type of work, for a fee.

If mediation doesn't work, your recourse is to sue her, which I'm guessing would be very detrimental to your relationship. If she doesn't have much in the way of assets, collecting would be difficult, not to mention potentially stressful and acrimonious.

--Helen Huntley answers readers' questions of general interest. Write her at St. Petersburg Times, P.O. Box 1121, St. Petersburg, FL 33731-1121, or call (727) 893-8230.

[Last modified June 27, 2006, 08:07:31]