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When a loan is in default does the lender have to notify the cosigner?
Wiki User
∙ 15y ago
When a loan is in arrears (past due), the creditor has the legal right to contact the cosigner unless the loan is included in bankruptcy. The Fair Debt Collection Practices Act states this fact. The sole purpose of a cosigner/guarantor is to guarantee the loan, hence it is likely if no payment arrangements have been made by one, they will collect from the other.
Wiki User
∙ 15y ago
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Can a co-signer have a negative entry removed from a credit report if the lender failed to notify him that the primary borrower was in default of the loan agreement?
No. There is no legal obligation for the lender to notify the cosigner that the primary borrower is in default.
Must the lender notify the cosigner of intent to collect on a default?
The cosigner was probably "notified" that any funds held by the lender would be attached at the time the loan was signed. In order to garnish wages or place a lien on other property, the lender would have to go to court and obtain a judgment, in which case the cosigner would have received a summons from the court.
Can the primary borrower be sued by the cosigner if a loan is in default and the lender sues the cosigner?
Yes. But for now the lender has you and will get their money from you as they would the primary borrower. Cosigning is a really, really bad idea. At least for the cosigner. Everyone else seems to benefit.
Does the lender on a car loan have to notify the cosigner before they repossess the car in TN?
They should since they are just as responsible for making payments as the primary.
What happens to the cosigner if you are in chp 7 bankruptcy and you default on your car loan?
If you default on your loan, the cosigner is stuck with paying it off. If your credit had been any good in the first place, you would not have needed a cosigner.
Can a co-signer have a negative entry removed from a credit report if the lender failed to notify him that the primary borrower was in default of the loan agreement?
No. There is no legal obligation for the lender to notify the cosigner that the primary borrower is in default.
Must the lender notify the cosigner of intent to collect on a default?
The cosigner was probably "notified" that any funds held by the lender would be attached at the time the loan was signed. In order to garnish wages or place a lien on other property, the lender would have to go to court and obtain a judgment, in which case the cosigner would have received a summons from the court.
Who is consigner?
If a lender does not feel comfortable with what they perceive as your ability to repay a loan they may ask that you get a cosigner. The cosigner is a person who would be guaranteeing the loan repayment if you were to default.
Who is a consigner?
If a lender does not feel comfortable with what they perceive as your ability to repay a loan they may ask that you get a cosigner. The cosigner is a person who would be guaranteeing the loan repayment if you were to default.
Can the primary borrower be sued by the cosigner if a loan is in default and the lender sues the cosigner?
Yes. But for now the lender has you and will get their money from you as they would the primary borrower. Cosigning is a really, really bad idea. At least for the cosigner. Everyone else seems to benefit.
Does the lender on a car loan have to notify the cosigner before they repossess the car in TN?
They should since they are just as responsible for making payments as the primary.
What happens to the cosigner if you are in chp 7 bankruptcy and you default on your car loan?
If you default on your loan, the cosigner is stuck with paying it off. If your credit had been any good in the first place, you would not have needed a cosigner.
Why do it have to affect the co-signer when its your debt?
Because the cosigner guaranteed the to pay the loan if you do not. You fail to make a payment and the lender will be looking at the cosigner for the payment. You not only have an obligation to the lender who lent you the money but to the cosigner who also signed his name to the loan agreement.
If you are a cosigner for someone and they default on the payments and the cosigner pays the debt off can you have the past due amount removed from your credit report?
No, you signed, you are equally responsible for the payments, you are also equally responsible for what happens with regard to default. This is why the lender permitted you to sign as a co-securer of the original loan.
What are your cosigner rights when a payment is not made?
As the co-signer of a loan you have more obligations than rights. You have signed a contract with the lender promising that you will pay the loan. If the person you co-signed for doesn't share your address (so you can monitor the account) you should ask the lender to notify you immediately in the case of a default. You should make the payment that has been missed and then seek reimbursement. Any default on the loan will affect your own credit record and if the other co-signer doesn't pay you will be held responsible for full payment of the balance due.
If you are a cosigner in someone's loan for a line of credit and he is at default what can the cosigner do to take his name back?
Nothing. The only option for being remove as a cosigner is to have the original loan refinanced without the cosigner participating.
What happens if a loan is in default and is deceased but has a co signer?
The cosigner now owes for the loan.
