If I co-signed for a loan for my niece 6 years ago but she dafaulted and a debt collector is harrasing me to pay, van it taketaking my entire savings?

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If I co-signed for a loan for my niece 6 years ago but she dafaulted and a debt collector is harrasing me to pay, van it taketaking my entire savings?

Asked on March 27, 2012 under Bankruptcy Law, Michigan

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

As a co-signor, you are as liable for the debt as the main signor--the creditor or its collections agent may seek to recover the debt from you. If they sue you and win and you do not pay, then there are a variety of tools which can be used to recover the money from you, including levying on a bank account (taking money from a bank account of yours), garnishing wages or income streams, executing on personal property (forcing its sale), or putting a lien on real estate you own. There are some types of income or assets typically exempt from collections, such as money in certain retirement plans/pensions or social security payments, but subject to those exemptions, you could potentially lose your savings.

You, in turn, may sue your neice to compel her to pay the amounts which she should.


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