What Are My Responsibilities If I
Co-Sign A Loan For Someone?
If you co-sign a loan for someone else, such
as a friend or family member, you are
responsible for the debt just as your friend
or family member would be. If the other
person does not pay the debt, the creditor
can come after you for payment of the debt.
You need to seriously think about it before
you co-sign a loan for someone. Generally,
people need a co-signer only if they have
credit problems. If they have credit
problems, will they be able to pay the debt?
If not, will they be able to pay you back if
you must pay the debt?
Are There Any Limits To My
Liability If I Am Only The Co-
Signer?
NO! You are just as responsible for the
debt as the borrower.
What Happens If I Co-Sign A
Loan For My Friend And He Does
Not Pay?
If you co-signed and your friend does not
pay, the creditor can come after you for
payment. The creditor can come after you
first without even suing your friend. If the
creditor sues you to collect the money, you
may have to pay court costs, late fees and/or
attorney fess (depending on the terms of the
contract). If the creditor sues you and wins,
your wages could be garnished or your
property taken to pay the debt.
You might have the right to sue your friend
to get your money back. However, if your
friend did not have the money to pay the
creditor, your friend probably will not have
the money to pay you either.
What Happens If The Person I
Co-Signed For Files Bankruptcy?
In most cases, unless the person agrees to
repay the creditor in the Bankruptcy Court,
the creditor can collect the debt from you.
The other person’s bankruptcy may also
have a negative effect on your credit rating.
You may have certain rights (especially if the
person you co-signed for is a former
spouse), and you should seek legal advice
immediately after you learn about the
bankruptcy.
What Should I Consider Before I
Agree To Co-Sign For Someone?
1. Once again, remember that if the
borrower doesn’t pay,