Can a lender hold a co-signer responsible for a secondary loan on which he or she didn't sign for?
Question Details: My wife cosigned for an auto loan for her then employed son. He later made another personal loan with the same lender. Later, he lost his job and is now in default on both loans. My wife had kept up payments on the auto loan, but now the lender is threatening to reposess the auto and garnish her wages if the second loan remains in default. What are her options?
Business Law Answers
Usually, only the first loan that your wife co-signed for would be her responsibility. But I don't know what the terms of the second loan were. For example, perhaps the second loan was considered an extension of the first loan instead of a completely separate loan. I would advise your wife to consult an attorney in her area experienced with creditor/debtor law. The attorney needs to carefully review the terms of both loans before determining what your wife's legal options are. Hopefully, the second loan is completely separate from the first loan and your wife will not be legally responsible for the second loan.
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