Legal Question in Credit and Debt Law in Maryland
Co-signers rights to collect from defaulter
A friend of mine co-signed on a loan for someone else. If the borrower defaults, and the co-signer pays off the loan, can the co-signer in turn sue the
borrower? Are there any other options that the co-signer has to recover funds?
Asked on 9/25/00, 12:59 pm
1 Answer from Attorneys
Daniel Press
Chung & Press, P.C.
Re: Co-signers rights to collect from defaulter
Yes, unless the co-signer is in fact the beneficiary of the loan, s/he can sue the borrower if s/he has to pay. Up front the co-signer could demand the same kind of security (collateral) for this indemnity obligation that would be available were s/he the lender, but if you are talking about a post-default situation without such security already being in place, the only remedy would be to sue.
Answered on 10/23/00, 9:27 pm
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