Co-signer problems

[timothyaw]

What is the name of your state?Co-signer state is Indiana, Primary borrower's state is North Carolina.

I know that as a co-signer I have just as much responsibiltiy to repay the loan as he does. I've learned my lesson for a so-called brother-in-law
Here is the background, he took out a student loan for a microsoft class. It's not a typical student loan, Wells Fargo has it. I'm getting the original loan papers from them soon to go over it again. We have had the loan about two or three years. After about six months he begin to run into financial issues; divorce etc. Therefore he started sending in his payments late sometimes, other times not paying at all. So I ended up making the payment. This has happened off and on since then.
Of course I've tried to tell him to refinance on his OWN, but he hasn't or he claims his credit is too bad to have anyone refinance him. I know I don't have too many options here, but are their some ways to make him or force him to refinance? One option I was thinking was when I get my money straight just take out a loan and pay it off and sue him to get it back? Does this make any sense?? Or would I just be letting him off the hook? Any ideas or help would be appreciated.

 

[dws1632]

You are both 100% borrowers for the loan. The loan has to be paid in full by either one or both of you. Non-payment reflects poorly on both of your credit scores equally. You will likely not be able to get a cent out of him because you are just as responsible for the loan as he is. You signed saying you will be responsible for the loan. If you have to pay the entire thing, that is not a breach of contract/loan on his part. By signing the loan, you said the loan will be paid by either one or both of you.

 

[timothyaw]

Thanks for your reply dws

 

[JETX]

You are both 100% borrowers for the loan. The loan has to be paid in full by either one or both of you. Non-payment reflects poorly on both of your credit scores equally. You will likely not be able to get a cent out of him because you are just as responsible for the loan as he is. You signed saying you will be responsible for the loan. If you have to pay the entire thing, that is not a breach of contract/loan on his part. By signing the loan, you said the loan will be paid by either one or both of you.

And of course, NONE of that is correct!!

The writer is a CO-SIGNER on the agreement, not a co-applicant. As a co-signer, you are a secondary party who promises, in writing, to guarantee the primary will abide by the agreement. If he/she fails, then the lender will turn to you for payment.

So, with that, lets give some CORRECT answers to the OP.

are their some ways to make him or force him to refinance?

Not really. You could try to get a court order for him to refinance, but that would be unlikely.... and expensive.

One option I was thinking was when I get my money straight just take out a loan and pay it off and sue him to get it back?

If you were to be forced to pay due to the failiure of the primary, you can file a lawsuit and get a judgment against the primary for your 'damages' (the amount you had to pay on behalf of the primary). However, your lawsuit can only recover the ACTUAL damages... and since the interest wouldn't have been paid yet.... you couldn't include it.

 

[dws1632]

Great Jetx, say I'm wrong as usual and post something slightly different which will get him the same results in court.

 

[dws1632]

"A cosigner's obligations are the same as those of the borrower. If the borrower(s) does not repay the loan, the cosigner accepts responsibility for repaying the debt."

I suppose JETX was slightly more correct than I, although, you will not win in court as was my original point.

 

[JETX]

Great Jetx, say I'm wrong as usual and post something slightly different which will get him the same results in court.[/QUote}

Here is where your post is NOT correct:
"You are both 100% borrowers for the loan."
Not correct. The secondary is just that... secondary and not obligated until the primary fails or breaches.

"The loan has to be paid in full by either one or both of you."
Not correct. The loan has to be paid by the primary. If the primary pays as agreed, the secondary is NOT involved.

"You will likely not be able to get a cent out of him because you are just as responsible for the loan as he is."
The secondary is 'responsible' ONLY if the primary fails or breaches.

"If you have to pay the entire thing, that is not a breach of contract/loan on his part."
That is not correct.

"By signing the loan, you said the loan will be paid by either one or both of you."
That is not completely correct.

 

[dws1632]

Every quote of mine you used, then said why it is wrong, looks like you just changed around what I said into your own words in a way. When I read your statement and mine they have the same general meaning to me. I guess we interpret things differently.

ALTHOUGH SOME OF MY POINTS MAY HAVE BEEN SLIGHTLY WRONG/MIS-INTERPERTED, MY POINT WAS HE WILL NOT GET A ****ING CENT. HE AGREED TO PAY IF THE ORIGNINAL BORROWER FAIELD TO.

 

[JETX]

EALTHOUGH SOME OF MY POINTS MAY HAVE BEEN SLIGHTLY WRONG/MIS-INTERPERTED, MY POINT WAS HE WILL NOT GET A ****ING CENT. HE AGREED TO PAY IF THE ORIGNINAL BORROWER FAIELD TO.

Okay, lets try this one more time.... read real s-l-o-w!!!

Your post was NOT correct. As proven by your above quote. There are 1000's of cases where a secondary (co-signer) has obtained a judgment against the primary for 'damages'.... the amount that the secondary had to pay on behalf of the primary.

 

[badapple40]

Jet's right.

dws1632's response makes it seem like the Primary and Secondary are jointly and severally liable for the loan (e.g. both have to pay no matter what), and makes no mention of indemnity (the fact that if the secondary has to pay, the primary is responsible to indemnify the secondary -- e.g. pay him or her back).

As an aside, if I recall correctly, it is not until after the primary breaches and the secondary is given notice of the breach by the contract holder that liability of the secondary arises.

 

[JETX]

As an aside, if I recall correctly, it is not until after the primary breaches and the secondary is given notice of the breach by the contract holder that liability of the secondary arises.

That is correct, but you would be surprised how many lenders never contact the secondary.... at least until after the property has been 'recovered' (if security) or the loan is already in default.

 

[TylerTheLawyer]

I agree with DWS1632's original post. Although it was not 100% accurate, his point was made and I agree. The poster agreed to pay if the original borrower defaulted, he took that risk on himself knowing he may pay the whole loan, and should not expect recourse. He should not have signed if he wasn't willing to take the risk. The OP can always take the chance in court, but should take this as a lesson learned.

Think about court costs, possibly attorneys fees, whether your relative will even be able to pay you if a judgement is made. Do you want to totally destroy your relationship with your relative? Depending on the amount of the loan it may be worth the cost. Think about it.

 

[JETX]

I agree with DWS1632's original post. Although it was not 100% accurate, his point was made and I agree. The poster agreed to pay if the original borrower defaulted, he took that risk on himself knowing he may pay the whole loan, and should not expect recourse. He should not have signed if he wasn't willing to take the risk. The OP can always take the chance in court, but should take this as a lesson learned.

Think about court costs, possibly attorneys fees, whether your relative will even be able to pay you if a judgement is made. Do you want to totally destroy your relationship with your relative? Depending on the amount of the loan it may be worth the cost. Think about it.

Yeah, right!! Just what we needed. This dweeb (dws) has now logged on using another name.... and then simply tries to support his own erroneous post!!

 

[TylerTheLawyer]

Wow, all the things my friends have told me about "JETX" are true. He really is a pompus jack ass. He has had a Coup D'etat on this entire message board and now rules it with an iron fist. Don't bother posting anywhere on this site, JETX will find your post and put you and everybody else down as if he wrote all the laws and has SUPREME POWER!

 

[JETX]

Wow, all the things my friends have told me about "JETX" are true.

So much for trying to hide behind the mask of 'new member, never been here', huh?? And the fact that you are saying 'friends' tells us you are already lying as everyone already knows you have NO friends at all.

He really is a pompus jack ass. He has had a Coup D'etat on this entire message board and now rules it with an iron fist. Don't bother posting anywhere on this site, JETX will find your post and put you and everybody else down as if he wrote all the laws and has SUPREME POWER!

Yep, your post (and the ISP) pretty much shows that this is 'dws' in someone elses clothes!!
And of course, you don't have to stick around if you don't like it. So long....