Legal Question in Business Law in New York

Co-Signed Loan

The borrower of a loan I co-signed for has defaulted their payments for the loan and I now make the payments. I am considering suing for the money, $1,879 to be exact. What do I need to ''fully'' prepare my case? Was it necessary to have a document from the borrower, stating they owe me these monies, if I make the payments. Thank you.


Asked on 10/01/02, 9:57 am

2 Answers from Attorneys
Sarah Klug Law Office of Sarah Scova Klug PLLC

Re: Co-Signed Loan

The loan itself is not enough to prove that the borrower owes you the money you have been paying the bank. Instead, what you need is an independent agreement between just you and the borrower stating that if he defaults on the loan, he will then owe you the money.

Good luck.

Read more
Answered on 10/02/02, 9:21 am
Michael Markowitz Michael A. Markowitz, PC

Re: Co-Signed Loan

Your obligation as co-signer of the loan was independent of the other co-signer's obligation to you. In other words, you should have had an indemnification agreement entered into between you and the other co-signer. The agreement would have stated that the co-signer would have the responsibility to indemnify you and make you whole should you make any payments under the loan.

Your other problem is that you don't have an acceleration clause with the co-signer. You will have to sue the co-signer on a monthly basis until the your obligation under the loan agreement is fully paid. With an acceleration clause, the co-signer would be responsible for full payment to you upon his or her default.

Good luck.

Mike.

Read more
Answered on 10/01/02, 10:17 am


Related Questions & Answers

More Business Law questions and answers in New York