As a co-signer what are my responsibilities?
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Loan co-signer responsibilities
A family member or friend asks you to co-sign or guarantee a loan: what does this mean and what is required of you? Keep in mind that acting as a co-signer does not mean simply signing your name at the bottom of a contract so that someone can get a loan, there is much more to it then that!
Co-signers are obligated to repay debt
You are in fact making a commitment to a financial institution to repay the loan if the other party that signed the contract is unable to do so. Carefully consider the circumstances of the friend or family member who is making the request. If the financial institution requires a co-signer, there is undoubtedly a very good reason. Perhaps the financial institution feels this person represents too high a risk. If this person does not meet their payments, a court could issue a judgment requiring you to repay the debt in full. This could adversely affect your credit file as well as your finances.
As the loan co-signer, can you afford to repay the loan?
Before agreeing to act as a co-signer, ask yourself the following question: can you really afford to repay the entire loan yourself?
Bankruptcy does not cancel the responsibility of the person who co-signed
Warning! Your bankruptcy does not cancel the responsibility of anyone who has guaranteed or co-signed a loan on your behalf. For example, if your parent co-signed a loan for you, that parent would be liable to pay the loan in full even if you decide to file for bankruptcy