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Question: i did a oral agreement to be a co-signer for bob. if he default, bob end-up defaulting, now i refuse to pay. the car dealer is suesing me. can i win
AZLawHelp Question 22139:
I orally agreed to be a co-signer for bob, if he defaults. Bob ends up defaulting, now i refuse to pay. The car dealership is now suing me. can I win?
Federal law requires creditors to give you a notice that explains your obligations before you co-sign, but it’s your responsibility to understand them. Even if a person is not the primary borrower, they are still fully responsible if the other person defaults on the debt. This could mean owing the full amount of the loan, plus late fees and collection costs.
If neither person can pay back the loan, creditors can use the same collection procedures against the co-signer, as if they are the primary debtor. This can include garnishment of wage, suing the co-signer, and if the debt goes into default, it will be apart the co-signer’s credit record. Also, in Arizona, there is no co-signer protection that limits creditors from immediately pursuing payment from either party upon default. Creditors could potentially collect from the co-signer before contacting the primary borrower.
For more information refer to:
United States Bankruptcy Code (Title 11, United States Code) and the Federal Rules of Bankruptcy Procedure
i did a oral agreement to be a co-signer for bob. if he default, bob end-up defaulting, now i refuse to pay. the car dealer is suesing me. can i win
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