SUE THE ORIGINAL BORROWER. You can file an action in small claims court (in some states such as Georgia this is the Magistrate's Court) to recover any amount you have to pay on the borrower's debt, plus court costs. If you succeed, you may be able to recover some or all of your loss.
Your best option to get your name off a large cosigned loan is to have the person who's using the money refinance the loan without your name on the new loan. Another option is to help the borrower improve their credit history. You can ask the person using the money to make extra payments to pay off the loan faster.
Being a cosigner does not give you rights to the property. A cosigner has no title or ownership in the property secured for the loan. Additionally, a cosigner has no legal right to occupy a home as a primary or secondary residence, unlike the primary signer/borrower.
In most cases, you'll be asked to cosign for a friend or family member who couldn't get approved for financing on their own. If they stop making payments, the responsibility will be passed on to you—and you could be sued if you don't follow through. Your credit could also suffer.
Each lender has its own criteria and process for removing cosigners, and some don't even allow it. So the best place to start is to contact your lender to find out your options. They may include: Co-signer release: An agreement to release the cosigner's liability after a certain number of payments are made.
If you're the primary borrower on a debt, your cosigner can take you to court for: Recovery of money paid: they can sue you to recover the money they've paid towards the loan. Fraud: they can sue you if you signed their name to the loan without their permission.
If you co-sign, you are responsible for the entire debt. This means that you will have to pay the full amount if the other person doesn't pay, even if you did not receive the goods or services. If the other person does not pay the loan, you can be sued and your wages and property may be taken.
The primary concern of a co-signer is if the owner can't make the payments on the vehicle. In that case, the co-signer could be held responsible for making the loan payments.
Co-signing for someone else could affect you significantly in any future loans you may apply for. Lenders refer to this situation as someone having too much credit and is often used as a reason to deny a loan application. Once you sign as a co-signer, there's no turning back.
Being a co-signer doesn't give you rights to the property, car or other security that the loan is paying for. You are the financial guarantor, meaning you must make sure the loan gets paid if the primary borrower fails to do so.
If the borrower has the ability to pay and simply won't do so, you may want to consider legal action. You can file an action in small claims court (in some states such as Georgia this is the Magistrate's Court) to recover any amount you have to pay on the borrower's debt, plus court costs.
It's important to remember that the co-signer has no rights under the mortgage, only obligations. Even if the primary is no longer making payments, the co-signer's only “right” is to make the payments themselves or allow the foreclosure to proceed.
To get a co-signer release you will first need to contact your lender. After contacting them you can request the release — if the lender offers it. This is just paperwork that removes the co-signer from the loan and places you, the primary borrower, as the sole borrower on the loan.
Additionally, the co-signer may need to pay attorney fees if legal action is required. Lenders can garnish the wages of co-signers.
If the borrower does not repay the loan, you may be forced to repay the whole amount of the loan, plus interest and any late fees that have accrued. With most cosigned loans, the lender is not required to pursue the main borrower first, but can request payment from the cosigner any time there is a missed payment.
The default will go on your credit report as well as the primary borrower's, and the lender can sue both you and the primary borrower to collect on the debt.
This may put you at risk for bankruptcy if you get overwhelmed by the debt the main signer can't pay. Eventually, that could lead to creditors filing a lawsuit against you.
Although liable for payments if you default, the cosigner doesn't share vehicle ownership. They also generally don't make regular monthly payments. Co-borrower: Also known as a co-applicant, the co-borrower shares financial responsibility and ownership of the car from day one.
If you were never married to your ex, the two of you have to work out a deal with each other. Worst-case scenario, you'll have to make timely monthly payments to protect your credit. If you have records of the charges your ex- made, you may be able to sue them in small claims court.
Co-signing means promising to pay back a borrower's loan if the borrower fails to pay. You have the responsibility of repaying the debt, but you don't have any right to use the loan proceeds. Read: Best Personal Loans.
Winning a damaged credit score claim is not easy. But it can be done, and people have won these cases against credit bureaus, lenders, credit reporting agencies, and other related companies. You have rights under the Fair Credit Reporting Act (FCRA) and protection under the Consumer Financial Protection Bureau.
Normally, a cosigner will have to stay on the mortgage for a minimum of one year. From my experience, normally a cosigner will stay on a mortgage for several years.
Having a co-signer on the loan will help the primary borrower build their credit score (as long as they continue to make on-time payments). It could also help the co-signer build their credit score and credit history, if the primary borrower makes on-time payments throughout the course of the loan.
Does Removing a Cosigner Affect Your Credit? Removing yourself as a cosigner of a loan will also remove all the data related to that loan. So, if the primary cardholder made consistent on-time payments, removing yourself could actually lower your credit score.