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May 30, 2007


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In the banking industry there is a commonly used synonym for a cosigner:
"Idiot with a pen."

It makes sense that putting your name on a loan makes you responsible for paying it. But can't you attach some sort of addendum to the contract giving you a right to take possession of the property if the buyer defaults? So if you co-sign a loan for your son on a car, and he defaults, can you take title of the car?

I've heard Dave Ramsey say that banks ask for cosigners because they know that the people they are offering the loan to cannot pay.

'Do not be among those who give pledges, Among those who became guarantors for debts'

Proverbs 22:26 (NASB)

Heard of one horrendous case of a party to a deal cosigning as an act of good faith and because he had no assets to go after anyway. Years later after he was no longer involved he did have assets and he was gone after. These agreements have a life of their own.

Watch the court shows, they're bound to turn up. Friends adding friends to their contract and then ending up with a thousand dollar bill, cars getting repossessed and ruining credit...

Basically, you're the back-up for the signer. So don't sign for what isn't yours, and you aren't going to get.

After my own financial mistakes in my very early adult years and again in the early 1990's (I'm in my early 40's) I had learned my least I hope. I have watched helplessly as our daughter has done everything wrong as a young adult who wants "to learn from my own mistakes" and actually bailed her out of early financial misadventures; but when she asked us to co-sign a school loan for a massage therapy program to the tune of $12K+ the answer was a resounding "NO." This decision was based on her past financial and educational history plus we went as far as to tell my mother and sister not to co-sign any loans for her. Needless to say, my sister listened but my mother didn't. So guess who ended up getting called when my daughter dropped out of the program, moved back home (not necessarily with our support), then went into default with her loan? My mom got the call from the creditors (daughter didn't bother to change her address or phone number with the loan company), she called me and gave them my name and phone number, then I had to take the brunt of my mom's anger plus become the message taker for my daughter.

The "sort of" happy mom sold off the mutual funds that she had bought for my daughter when she was born and $6K (the amount my mom co-signed for) was put toward the school loan. My daughter decided eight months later to go back to the program, but had to get an additional loan because she had been out of school for so long and says that the original loan had gone into "forbearance." She eventually finished what should have been a 10 month program in two years, has moved back home temporarily (after trying to live in NoCal and SoCal while working at coffee/juice/burger joints and NOT working in massage...oddly enough she was offered a job at a prestigious spa in the Napa wine country an turned it down!), and will hopefully start listening to people who have a little life experience. Fat chance fo that happening...what is it with 21 year olds and a) not wanting to listen to advice from people who have already made those same mistakes? OR b) not thinking things through completely? Yes, I know, hindsight is 20/20. Yeah, I'm part of the "been there, done that" club too.

Now, just to help her find a massage therapy job so that she can start paying off her loan(s) and any other bills that she hasn't told me about.

What is really messed up is that even if the co-signer ends up paying 100% of the loan, they are still not entitled to any of the property. There are only disadvantages to co-signing.

I took a different tack on behalf of a relative. I worked out that I could handle it if she could not pay it back, took out the loan on my own, handed over the money, and she has been paying it back. She got a bit behind for a while, but she's current now.

My 'fiance'(this is in quotes because I have no engagement ring)asked me to cosign a loan for him yesterday for a motorcycle. He told me the terms of the this loan, saying in 6 to 12 months the loan would be tooken out of my name and into his. He will be making the payments on it. I told him this morning that I wouldn't be able to cosign for him.I'm Sorry. I don't have the extra money in the event he defaults on it, I'm in the process of cleaning my credit, and I just have a bad feeling about it. He went on to attack my character saying it's all about me and that I have the attitude of I got mine, you get yours. He hangs up in my ear. Today is his birthday and I don't know where he is.
When someone ask you to be a cosigner and you have the courage and common sense to say no, prepare to get a reaction that you'd least expect because they will show their true selves.

I think there can be different situations. Some people need a co-signer (like me) because they have limited credit history. I am simply too young. That's why I'm applying for a fair credit credit card and asking my Dad to co-sign it. We both know that I will have no problem in paying it off and even if I do aren't your parents the ones to help you in difficult times?

I dont think the situation is always the same. Like myself i'm an International medical doctor and I needed a residency loan for my residency program, i couldnt have applied for the loan by myself based on my status, i definately need a US national or resident to do that for me. Someone co-signed for me and now I have paid back in full and her credit has really gone up. I believe it depends on individual circumstances.
Had it been that no one cosigned for me, i couldnt have practised.

My Sister-in law talked me into going to an expensive west cost school my freshman year of college. She is ten years older I am and comes from a very wealthy backround. My parents don't have any money but she wanted me to have a similar college experience like she did. Well needless to say I hated the school, finished out the year but didn't want to go back. Every time I have been late on that loan (which hasn't been often) she calls me up screaming at me. She is also irate that I didn't finish school where she wanted me to go. Since then I have finished up my MFA in a school that I liked and payed off a lot of my debt. This subject is a sore one between my brother and her till this day. I still don't talk to her till this day because of the way she handled things. I was only 17 at the time and didn't have the financial experience to know better. Now I do know to never get involved financially---there are always strings attached.

My dad cosigned the loan for my first car since I had not credit history at the time. I'm glad he did since the car lasted a long time and he's glad since I made the payments. It helped both of our credit records too.


My boyfriend got into a big mess. His A**HOLE uncle and aunt asked him to take out a loan for $6,000 worth of furniture because their credit is so bad they can not get a bubble gum on credit. It was always understood that THEY would pay and it was NOT A GIFT!!!!

HA! Those S.O.B.s NEVER paid one payment but were still lying to him saying they are paying. Meanwhile customer service at the bank and the Collection Agency say differently. My boyfriend did not have the money to make the payments for them to keep the loan in good standing.

Those bastards also had the credit card sent to their house (not my boyfriend's) and had the audacity to go on another shopping spree and bought another $2,000 worth of furniture so now the balance is $8,000 PLUS crippling 30% interest because the loan went into default.

My boyfriend is now the one holding the bag and he is trying to take his furniture back so they will have the empty house they deserve!

They did this on purpose. They know the law well enough to play the system. They KNEW that since my boyfriend's name is on the loan, legally, they were not bound to pay the loan. They purposely bought crap well out of their means and never planned to pay it back.

I am so mad that he was so trusting of them and he has a big heart that they exploited. By the way: His uncle also did the same thing to his own sister--he had her co-sign for a car loan that he never paid. They are real con artists. Both my boyfriend and his uncle's sister both had good credit before they sh*t all over it.

His uncle's wife got really upset with my boyfriend for telling others what she and her husband did. I told her to tell her that telling others is not gossip or is a WARNING to others that they are CON ARTISTS! With "family" like them who needs enemies?


Legal question:

If somebody cons you into signing a loan for you and does not pay, I understand that the law says you have to pay.

However, can you sue the con artists for pain and suffering and make them see the consequence for their blatant misdeeds?

I will never cosign for anyone. I cosigned a mortgage for my mother. My credit was in the high 700's, but not anymore. Now I am in a bad situation explaning to creditors that it is not me who defaulted, it was my mother. Nobody wants to hear that. They go off of what they see on paper.

My husband co-signed a loan for my son's truck. Every month for 5 years my husband had to make the payment, then worry when my son would pay him. My husband's credit rating was at risk, not my son's. We will never co-sign a loan again.

I purchased an investment property FOR my mother and was only supposed to hold it for 3 months until she got some things off of her credit. She said she'd have renters to cover the mortgage....they never materialized. I have been struggling to pay a $3000 mortgage on time every month. As soon as I sell this house....I'm telling my mother good riddance. I will NEVER sign for or co-sign ANYTHING for ANYONE EVER AGAIN!

i want to co sign an auto loan for my daughter. i don't work but my husband does. we both have ecellent credit. will this loan show on my husbands credit score and history?

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