Legal Question in Real Estate Law in Michigan
co-signer liability
when an individual co-signs for a car loan are they assuming responsibility for the debt if the owner can not make the payments. in the event the co-signer has to pay the debt does he have a valid lawsuit against the owner for monies paid by the co-signer.
2 Answers from Attorneys
Re: co-signer liability
Yes, the cosignor is liable for the debt. No, the cosignor does not necessarily have a cause of action against the primary debtor, unless an express agreement exists where the debtor holds the cosignor harmless. For more info, contact my office at (248)851-3171.
Re: co-signer liability
Yes, as a co-signer you are agreeing to make payment for the vehicle if the other co-signer fails to make payment. The seller requires a co-signer because he or she is afraid that the person attempting to purchase the vehicle has a bad credit record and may not make all the payments. The seller requires the co-signer to protect himself or herself from non-payment.
Yes, you can bring a lawsuit against the person you co-signed the note on, however please remember if they cannot make the vehicle payment they probably don't have any money to pay any judgment you may get against him or her. Furthermore, they can always file for bankruptcy and void any judgment you receive from the court. So, please carefully consider being a co-singer.
Joseph F. Petrylak
653 S. Saginaw, Suite 213
Flint, MI 48502
(810) 874-6150 (New Office Address)
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