The Dangers of Co-signing a loan for someone
Fairmax Law™ Founder Michael Jaafar speaks with Fox 2 News anchor, Murray Feldman about the dangers of co-signing for a loan. Learn more about this issue here, and about Fairmax Law’s Bankruptcy starting at $555 plus costs. Call them for a free same day over the phone consultation with a licensed attorney at 888-FAIRMAX.
How It Starts
So your friend, or brother, or grandson calls you and says “Good new, I was approved to lease my first car, and I am really happy about that because I need it for college. I’m thrilled!! There’s only one catch…I need a co-signor. Would you mind meeting me at the dealership tomorrow when I go to pick it up? You only have to sign your name on some papers, and I can get the car.”
What do you do? Say “NO!”
What protections do you have
To put it simply, you have no protections if the primary debtor on a debt stops paying it. If you co-signed on the loan, you will be stuck paying the entire balance. The only way out of that is to file for Chapter 7 or Chapter 13 Bankruptcy. And to make matters worse, you will be responsible for the entire balance. Not just half of it.
And since the debtor needed you to co-sign for the loan in the first place, the creditor will know that you (the co-signor) are more collectible than the original debtor. That is why they needed you to co-sign in the first place.
Presumably, you had a job and paystubs, and the debtor did not. Or you had all of those things, and A plus credit. So you will be the main target when the debtor stops paying on the loan.
So the final conclusion is that you should never co-sign on a loan for anyone, unless you are willing and capable of paying the entire debt yourself.
This article is not meant as legal advice, and Bankruptcy is very complicated depending on every persons overall financial situation. So, if you are considering any chapter of the bankruptcy code, is it called one of our attorneys for a free, same day consultation. To learn more about Chapter 7 or Chapter 13 Bankruptcy, the federal government has excellent information about it on their website at http://www.uscourts.gov/services-forms/bankruptcy Fairmax Law™ is a Service of Jaafar Law Group PLLC and is a designated debt relief agency that helps clients file bankruptcy under the federal bankruptcy code.
This article is not meant as legal advice, and chapter 13 is very complicated depending on every person’s overall financial situation. So, if you are considering any chapter of the bankruptcy code, is it called one of our attorneys for a free, same day consultation.
To learn more about Chapter 13 Bankruptcy, the federal government has excellent information about it on their website at http://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-13-bankruptcy-basics
Fairmax Law™ is a Service of Jaafar Law Group PLLC and is a designated debt relief agency that helps clients file bankruptcy under the federal bankruptcy code. These disclosures are required pursuant to federal law, and they are here for your protection. http://fairmaxlaw.com/required-disclosures-and-information-about-bankruptcy/
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