The decision to co-sign on someone’s behalf is not a decision that you should take lightly. Commonly, the levity with which the request for you to co-sign on behalf of a friend, family member or romantic partner seems to undermine the importance of the decision. It may seem as if it is no big deal to co-sign. After all, you know the intended borrower to be the “nicest, sweetest, most honest person ever” and he or she would never cause any financial harm to you, right? Furthermore, you are not really responsible for the debt, right? Is it not the responsibility of your friend, family member or partner to make the payments?
The truth is a hard one. The prospective creditor is requesting a co-signer because based on the credit profile of the intended borrower, the former is not convinced that the borrower can or will be able to repay the debt. The creditor makes this decision as purely a financial one. It does not take into account the character of the intended borrower. This does not mean that your friend, family member or partner is not the “nicest, sweetest, most honest person ever,” but the truth is life happens. Even with the best of intentions, people encounter financial difficulties that may make them pay the account late or unable to pay at all. Anything from a sickness, job loss, failed relationship or death could cause the primary borrower to default. As the co-signer, you are as impacted by the late payment or non-payment as the primary borrower. This means that the creditor could report derogatory mark against your credit and even sue you, the co-signer, for the unpaid debt.
If you are being sued for a debt for which you co-signed, the worst possible thing that you can do is to ignore the lawsuit because you believe that the primary borrower is the one responsible. Ignoring the lawsuit increases the likelihood that the creditor will obtain a judgment. With a judgment against you, the creditor may seek to garnish your wages, or bank accounts or trying to sell certain assets in order to payment of the debt through going after any other unprotected assets.
The best defense to a lawsuit against you as a co-signer is an aggressive offense. This starts with a knowledgeable and aggressive legal team that will protect your rights.
For more information about debt defense, please visit our website here.
Loan Lawyers has helped over 5,000 South Florida homeowners and consumers with their debt problems, we have saved over 1,800 homes from foreclosure, eliminated $100,000,000 in mortgage principal and consumer debt, and have collected millions of dollars on behalf of our clients due to bank, loan servicer, and debt collector violations, negligence and fraud. Contact us for a free consultation to see how we may be able to help you.