As a co-signer on a student loan, can I sue the borrower if he/she refuses to pay?
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As a co-signer on a student loan, can I sue the borrower if he/she refuses to pay?
I co-signed a student loan for my ex-wife 4 years ago. I’m now getting calls from Sallie Mae because it’s been in repayment for the last 3 months and she has not made a payment. I am capable of paying the loan off in full right now, but it would take everything I have saved, though I’m fairly sure she has no intentions of making a payment. Further, if a judgement is made in my favor, how would I go about collecting the debt?
Asked on February 6, 2012 under Bankruptcy Law, Arizona
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
1) Yes, a co-signor to a loan can sue the signor if he or she does not honor his or her obligations under the loan and pay.
2) You have to pay the loan yourself, however, while seeking recourse against your ex-wife, unless you are prepared to risk damage to your credit rating, litigation by the lender against you, etc.
3) If you sue your ex-wife and win and she does not pay, there are several mechanisms available to you to collect, including garnishing her wages; executing on (having the sheriff sell) property, such as vehicles; putting a lien on real estate; levying on (taking money from) a bank account. An attorney can help you with these--they can be somewhat tricky to implement if you are not familiar with the procedure(s).
4) You need to factor in the terms of any divorce settlement or decree, in terms of the responsibilities of yourself and your ex-wife for any debts, in determining what your rights are.
From what you write, it would make sense to consult with an attorney about this matter. Good luck.
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