If I’m the co-signer on a loan, can I be sued for the deficiency if the primary borrower is employed and makes more money than I do?

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If I’m the co-signer on a loan, can I be sued for the deficiency if the primary borrower is employed and makes more money than I do?

I am a co-signer of a motorcycle which was repossessed and is now in collections.

Asked on April 19, 2012 under Bankruptcy Law, New York

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Yes, you may be sued for the deficiency. As a co-signor, you and the primary borrower are "jointly and severally liable"--that means that the lender may sue either or both of you, at its option, for the money; and either one of you individually can be held liable for the full amount (though the lender cannot collect more than the outstanding principal balance, plus any permitted fees or costs, in total). The lender gets to choose who to sue, and can elect to go after the person with less assets or income, if it wanted to.


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