Can a person take someone to court if they co-signed and had to pay the most of a loan or is it just a loss?

Answer 1

I'm not clear on who is bringing whom to court.

A cosigner of a loan is someone who GUARANTEES the loan. It's needed if the MAIN loan-ee has poor or no credit.

If the first person defaults on the loan, the second person is FULLY RESPONSIBLE for the balance. The second person CAN BE SUED by the party who gave the loan in the first place - actually, as the first person has poor credit and the second doesn't, the party giving the loan usually doesn't bother to collect (aka sue) the first signer, only the co-signer.

Can the co-signer sue the first person if they end up having to pay the loan off? Probably not - what would you sue them for? You went into this knowing they had bad credit, and promised to make good for them if they defaulted.

Answer 2

In most cases, the co-signer enters into the contract as part of risk mitigation for the lender.

That risk is that the main signer won't pay and the co-signer would be required to.

The contract itself obligates the co-signer to the lender....but it does NOT AT ALL obligate the signer to the co-signer...

Thus there is no legal obligation for a signer who doesn't pay to have to pay a co-signer that does pay.

If the co-signer wants to....they can make a separate stipulation under a separate contract to bind the signer to payment....the agreement could say that the signer must pay and if the co-signer is required to pay...then the signer is obligated to pay the co-signer back.....BUT this must be a separate contract signed between the two signing parties.

Answer 3

Keep in mind I am not an attorney....however, in some jurisdications, you can sue the person depending on the circumstances.

Was the car repoed? Were the payments behind and you had to fork over the back payments and it hurt your credit? Or did you just make the payment on time because the other person couldn't?

As I mentioned, it depends on your jurisdiction. This may seem silly but if you dont' already, tune into Judge Judy or People's Court--there's always cases about this on.