Legal Question in Bankruptcy in New Jersey

A co-signer is someone who accepts responsibility for repayment of credit or a loan along with the primary borrower. A co-signer may also be called a guarantor, a co-borrower or co-applicant.

Generally, a co-signer is required on a loan when the primary borrower has inadequate resources or credit history to secure the loan alone. In some instances a co-signer�s good credit history can improve the terms of the loan, for example by reducing the interest rate on the loan, and in some cases if the co-signer has bad credit, then the loan may be rejected.

The college wouldn't ask for a co-signer unless there was a reason, so your ability to be a "good" co-signer in these private loans could be VERY important.

A co-signer takes on the full legal obligations of the loan, along with the primary borrower. If the primary borrower does not make the required loan payments, the lender will ask the co-signer to make them. The co-signer can be held accountable for the entire amount of the loan under the terms of the contract, in the same way as the primary borrower.

A co-signed loan will appear on the co-signer�s credit history and report as well as on that of the primary borrower. Since a co-signed loan is factored into the co-signer�s debt-to-income ration, it could affect the co-signer�s ability to secure a future loan.

If you decide you are not the best person to co-sign, I would recommend asking other family or a close friend who knows your daughter.

Mike