What are a co-signer’s rights?

UPDATED: Sep 17, 2012

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What are a co-signer’s rights?

My friend and I received a loan for furniture. I was the one in charge of paying it each month. I’ve been paying it by myself for the past 3 months because she has stopped paying me. Because my mom is the co-signer on the loan she thinks I will continue to make the payments anyway. I’ve talked to my mom and we decided that I am no longer going to pay on the loan because my portion is paid in full. With my friend being the primary on the account,can she take my furniture if I have proof that I’ve paid my portion? If she chooses to not continue the payments and it goes to collections,do they collect from the primary or the co-signer first? If my mom ends up having to pay it, can my mom sue her for the amount owed?

Asked on September 17, 2012 under Bankruptcy Law, Mississippi


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

If the loan is not paid, the store or lender may sue any of the signers--either your or your friend--or the cosigner--your mother--for the remaining balance. Depending on the terms of the  loan and the sale agreement, they may also be able to repossess the furniture. It is doubtful that your friend can get the furniture, if you can show that you paid and she did not. Any signer who ends up paying more than his/her share, or cosigner who ends up paying because a signer defaults, can look to recover money from the one who should have paid but did not. If the loan is not paid, bear in mind that the credit rating of everyone on the loan will be damaged by the default--even your mother.

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