What is a co-signer’s obligation regarding a defaulted loan?

UPDATED: Jun 10, 2011

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

UPDATED: Jun 10, 2011Fact Checked

Get Legal Help Today

Compare Quotes From Top Companies and Save

secured lock Secured with SHA-256 Encryption

What is a co-signer’s obligation regarding a defaulted loan?

I took out a loan with a friend for a motorcycle for him. He didn’t pay. Do I owe if I didn’t know anything about it until the bike was repossessed?I never received any letters about the motorcycle. I had no idea he wasn’t paying. When the repo guy showed up at my house I told him where the guy lived. If I had known that he wasn’t paying I would have taken the bike myself and paid for it.

Asked on June 10, 2011 under Bankruptcy Law, Indiana


S.L,. Member, California Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

As a co-signer, you would be liable for the loan on which your friend defaulted.  The lender could sue you for the deficiency which is the difference between what is owed on the loan and the amount the lender recovered when the motorcycle is sold.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption