Mississippi Consumer Help Blog
Did you co-sign for your child’s car loan? Are you a co-signer on a loan for your friend? Have you co-signed for a loan for another family member? If so then you owe the loan the same as the primary borrower does. It does not matter who has their name listed first or second on the papers. If you signed the contract or the note then you are a co-signer and owe the full amount of the loan. The primary borrower may be paying right now, but if something were to happen to stop payments, debt collectors will be hot on your trail for the balance.
Finance companies and banks do not release co-signers from loans. They demand a co-signer so they will have someone to go after if the first borrower stops paying. They knew up front that the first borrower was at high risk to stop paying and they wanted you to be there so they could go after you for part of the debt, half of the debt, or all the debt. They will go after whomever is the easiest to collect from. So think long and hard before you become the co-signer of a debt for someone – and if you do – make sure you are willing and able to pay the whole debt if something happens.