I get asked by clients all the time why they are now being sued for a debt they guaranteed or co-signed with another individual, usually a relative or close friend. They will say “I am just the co-signor. It is their debt.”, or “They are the primary, I am just the secondary.”
Creditor’s Right to Sue You
Unfortunately, whenever you sign your name on loan papers whether it is for your debt or someone else’s, you are creating a binding legal relationship. The lender, also called the creditor be it a bank, credit union or credit card issuer has obtained in the fine print the right to sue you on your guaranty for the debt involved. In other words you and the person you are signing with are both equally 100% liable for the debt.
Hopefully, the person with whom you have co-signed, with will make every payment as they become due and you will never be confronted with this issue. But, if they ever default on payments, the creditor has the right to come after you and they almost always do so. The creditor does not even have to sue the primary with you on the lawsuit especially if they know you have the means to pay the debt and the primary does not. In reality, that is the main reason you were asked to sign in the first place, because the creditor knew you could pay if the primary did not.
As you can see, co-signing or guaranteeing debts for others come with real financial exposure. If a creditor files a garnishment against you on a judgement they have obtained against you for a debt that is either solely yours or one that you co-signed for, please do not hesitate and call one of our conveniently located offices at Bond & Botes closest to you.
If you have any questions regarding any aspect of Bankruptcy in Alabama, Tennessee or Mississippi, please call one of our Bond & Botes affiliated offices. We offer free initial consultations so feel free to call one of our conveniently located offices to set up a private consultation with one of our experienced attorneys. If you have questions regarding Chapter 7 Bankruptcy, Chapter 13 Bankruptcy, stopping foreclosure or wage garnishment, avoiding liens, stopping lawsuits, discharging debt, etc. we can help!
We will analyze your situation and help you make the best decision possible to help you with your financial problems.
Grant McNutt is a Managing Attorney at the Bond & Botes Law Offices in Florence and Haleyville, Alabama. He holds a Bachelor of Science from the University of Alabama, and a Juris Doctorate from the Birmingham School of Law. He has been practicing Consumer Bankruptcy Law since 1999.Read his full bio here.