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Co-Signers May Find Themselves Faced with Collections Lawsuits – Beware!

co-signers
  • Feb 11 2019

As consumer debt climbs toward $4 trillion in the US, many consumers are still busy borrowing. And while banks and other creditors may want to continue lending, the process is not always as easy as it may sound in media advertisements or letters inviting you to take on a new home, vehicle, car, or even more commonly, a new credit card (or two, or three). The average household with a mortgage is in over $135,000 of debt, beholden to lenders for student loans ($47,671), cars ($28,033), and credit cards ($6,929).

Certain types of loans may require co-signers if the original borrower has not built up enough credit or has a low credit score. The lender may agree to the deal if the borrower has solid backing in the form of a co-signer with extensive, positive credit history. A typical example of this scenario is a potential borrower asking a parent to co-sign. This could be for nearly any type of loan, and it is vital to understand exactly what you are signing on the dotted line for. You may have great trust in the borrower, and especially if they are family, but circumstances out of their control (illness, an accident, divorce, unemployment) could cause a default. If the primary borrower is unable to pay, a creditor will waste no time going after the co-signer.

If you don’t mind satisfying the debt, then there isn’t a problem, but in many cases, collection activity toward a co-signer can come as a major shock. Consult with an attorney from a firm like Fitzgerald & Campbell, APLC as soon as possible to review all your options.

Private student loan debt is an area of concern for co-signers too, especially today as so many younger borrowers find themselves in crisis financially. While they may have had high hopes in terms of graduating with a career and substantial income, all too often that does not work out (in many cases they may be successful but are still hindered by massive repayment issues) and they are left struggling to support themselves with even the most basic quality of life. Co-signers in this situation may be faced with collections lawsuits, and if not handled properly by a legal expert, they could develop into default judgments resulting in loss of wages, loss of control over financial accounts, and seizure of property.

If you are currently delinquent or worried about defaulting on your student loans, contact Fitzgerald & Campbell, APLC now so one of our experienced student loan debt attorneys can review your case and discuss all the available options with you. Our attorneys have decades of experience in serving clients as they navigate through challenging financial situations, to include student loan issues, bankruptcy, and other debt management processes. We are here to help! Call us today for a free consultation at (855) 709-5788 or email us at info@debtorprotectors.com.

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Posted in: Collections lawsuit