What are a co-signer’s rights if the other co-signer fails to make payments regarding a student loan?
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What are a co-signer’s rights if the other co-signer fails to make payments regarding a student loan?
I co-signed a $20k student loan for my nephew 3 years ago. Despite inheriting $50k from his father’s estate last year, he has not made any student loan payments. I have made $4k in payments so far. Is it possible to get a judgement against my nephew to not only reimburses me for the payments that I’ve made, but also forces my nephew to set aside funds for future loan payments? Is there a limited time period in which I can pursue legal action?
Asked on March 5, 2011 under Bankruptcy Law, Illinois
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
1) As a cosigner, you can sue the other signer for the contributions he should have made under the loan, so this something you should definitely pursue. No legal case is certain, but there are grounds for this, and you should consult with an attorney.
2) You *may* be able to get an injunction requiring him to make future payments. It's not a given, but it would be worthwhile to discuss with your lawyer and possible add to the complaint, as long as you'll be suing your nephew anyway.
3) You most likely have 5 years from when your nephew failed to pay--treating it as an oral agreement between you that he would be the one to make the payments. It's possible you might have as long as 10 years, if the loan agreement itself is treated as the basis for the suit (written contract). There is no reason to delay or hesitate, however.
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