Hello,

I am extremely angry right now so please be patient with me. Here is the problem in a nutshell:

1. Previously consolidated federal student loans with spouse.
2. Legally divorced spouse due to spouse adultery.
3. Divorce settlement court order requires loan unconsolidation with 50/50 reapportionment of liability to each party.
4. Ex-Husband defaults on repaying his portion of loan and me and my new husband get dingged on OUR credit reports even though our repaymnet history is clean.
5. Our loan servicer will not unconsolidate loan per divorce court order and says federal law prohibits it so buzz off and suck it up.

So, even though we've been divorced for over 10 years now, and we have a court order stating unconsolidation of loan, I am still paying for the ex-creep's behavior and my new family is suffering for it.

My question is this - What is the specific law and section governing this rediculous, unfair, and unjust treatment and how do we get it changed?

Unfortunately this was all written into the contract you signed. All the information sheets I ever saw on spousal consolidation stated that if you divorced, you had to deal with it.

The laws have been changed....they no longer permit spousal consolidation since July 1 of last year.

Civil actions have never been enforceable by a third party. You have to enforce it by hauling your ex back into court and sueing him.

Sorry.

Lynn is absolutely correct.

Here are the 2 paragraphs right above you and your spouses signatures on the old pre-July '06 FFELP consolidation promissory note:



Although spouses are no longer legally allowed to consolidate their student loans together, spouses who did so while it was allowed are still held responsible for the promise they made on that Note I quoted above.
As Lynn mentioned you can take action against the ex-spouse who has failed to repay what the lower divorce court ordered them to pay, but nothing a lower court orders will change the terms of the Higher Education Act or your original promissory note, which were made by the Federal government.

I believe I did locate the exact law. Here you go:

For FFELP loans (meaning the holder of the loan is someone other then DE):

Code of Federal Regulations Title 34 part 682 section 206

"(3) A Federal Consolidation loan may be made to two eligible spouses
provided both borrowers agree to be jointly and severally liable for
repayment of the loan as co-makers."

(Authority: 20 U.S.C. 1077, 1078, 1078-1, 1078-2, 1078-3, 1079, 1080,
1082, 1083, 1085)

http://a257.g.akamaitech.net/7/257/2422/08...4cfr682.206.htm

I agree with you completely. It is an unjust law. My husband is in a similar situation right now and it is disgusting. The fact that he is tied to his ex forever is disturbing to me after what she did to him. It is hard for me to see the emotional roller coaster that it sets us on every time she is late on a payment. It doesn't even show up on her credit because she isn't the primary so we are the only ones suffering. Threatening with further court action has been helpful, but I can't take this anymore. There is no reason why they cannot accommodate. They prey on the young and foolish. This clause wasn't even mentioned to my husband, he just trustingly signed. Needless to say it is a mistake that he won't make again, but one he will pay for the rest of his life.

I think the law should be amended! Who would we contact? Maybe I am naive, but I am holding out hope that if enough people approach the right people with their story something could happen.

The law was already changed last year. They no longer offer spousal consolidation. However those already consolidated will just have to deal with it...they are not going to change it.

Actually, there IS something you can do if your spouse defaults on their part of a debt that a divorce court orders: sue them and obtain a judgement.

Yes, while it's true that the creditor (be it a student loan, credit card etc) is not bound by the orders of a divorce court, it is still binding and you can sue for enforcement via civil court. A judgement, depending upon your state, can allow you to garnish wages, etc. You can also sell the judgement off to a collection agency should you wish.

It's like this for any debt, NOT JUST Student loans!! Any debt you incur as a couple in both names remains the responsibility of both parties until it is either paid off or refinanced.

and, Lynn, for the record, I'm in my 30's and still wouldn't have the slightest clue what "jointly and severally" means if it weren't for CB, And as for "asking questions" I heard many asked but no one in the student loan office at my last school could really explain it. But I guess since you're perfect that you've never made mistakes, right?

When you work in a field, sometimes it's easy to forget that not everyone knows the basics of it.

I sometimes get frustrated with people who ask HTML questions, you know?

Unfortunately, the most-used class I took as an undergrad was business law. It was painful, but it was worth it.

Lynn never said she was perfect. Since you keep harping on how no one at your school ever explained anything about your student aid to your satisfaction, including things as basic as the fact that your financial aid included one or more loans, I have to question why in the universe you would sign anything with bold and obvious sentances like

"I UNDERSTAND THIS IS A FEDERAL LOAN THAT MUST BE REPAID"

as the very last sentence, boldface, all caps, right above your signature, if you felt confused.

Back to the matter at hand, the whole joint and severe liability without regard for individual loan obligations or changes in maritial status is followed with

"I understand this means that I may be required to pay the entire amount due if my spouse is unable or refuses to pay."

Not exactly delicate, subtle, confusing, or misleading to a layman that actually takes the time to read.

Heck I had business law in high school. In 11th grade I could have explained "jointly and severally"...basic contract law.

My comment to Lynn is regarding a history of posts, not just this one thread.

And WTF are you talking about that "I keep harping on"??? For pointing out that when I stood in the student loan office, the people working there were unable to answer questions that I heard being asked?? I've taken out two separate loans for being in school, one being recent. My SL papers are irrelevant, but my first one didn't have big, bold writing on it. I didn't default on my loans, nor were they ever paid late either, but thanks for assuming I had.

If you and Lynn are going to continually insult and be rude to our posters, implying that they are "morons who can't read" then the mods ARE going to be in here setting things straight, up to and including warnings.



Well, aren't you just perfect! You must be just THAT much smarter than everyone else, huh? Or maybe you were more educated than most of us.

Why is it that every time I read one of your posts, I can picture you with a snide little collector's smirk on your face?

Not everyone who posts is attempting to shirk responsibility, you know. If you'd ever venture out of the SL forum into the credit forum for things OTHER than your own issues, you'd see that the issue of divorce court ordered debt division is an issue all around and the majority of people who have dealt with it don't understand that it's not binding on creditors. I guess all divorced people must be stupid, too, huh?

You need to remember that not everyone is as educated as you, maybe they're not as business savvy or maybe they just really aren't the brightest bulb on the tree. Hell, some people wouldn't know what common sense was if it smacked them upside the head. And, as direred pointed out but you seemingly glazed over, It doesn't matter what the case is, our posters don't deserve the harsh treatment they get on a routine basis in this particular forum. This is why you've garnered the attention of the moderating team once again.

It really, truly is a shame you can't put your former collector's experience to good use BENEFITING people.

Please be kind enough to refrain. That's all.