Legal Question in Credit and Debt Law in California
My previous question on this was poorly written.
My elderly Mother wants to co sign a loan for her young granddaughter who's 21.
What liability does my Mother really have if my Niece doesn't make payments?
I would never let my Mom take over payments and if her credit is harmed, we wouldn't care, she doesn't need that kind of credit now anyway. Could she just walk away? What would be the consequences?
1 Answer from Attorneys
If your niece defaults, you mother would become liable to pay for the debt. If the loan is not payed, the car will be repossessed and the lender will sue for the remaining balance on the loan, interest, attorney's fees and costs.
Your mother's estate would remain liable for the debt, even after her death. However, if there is no money, the lender would have no way of collecting the money.
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