What to do if signed a loan for someone else and they have defaulted?
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What to do if signed a loan for someone else and they have defaulted?
My son, who is very naive, signed for a loan on a motorcycle for another person. This person never made a payment and the bank is now suing my son. What can he do? He can give the bank the name of this person.I know that is not enough but he truly is so trusting that he did not have this person sign any paperwork stating he would repay the loan. This person also has taken advantage of my son in many other ways we are just finding out about. My son has to file bankruptcy because of this.
Asked on October 18, 2010 under Bankruptcy Law, Wisconsin
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 14 years ago | Contributor
Your son, if he was an adult (18 or over) when he cosigned this loan, may have no recourse against the bank. As a cosignor, he is a legally liable for the debt as the signor; the bank may choose to go after either or both of them. (If he was under 18, the loan may be unenforceable as against an "infant"--speak with an attorney in that case, about seeing about whether he could get out from under the loan on that basis.) He may be able to sue the signor for the signor's contribution--i.e. to make the signor pay, too--but unfortanately, that's the best he can do, and depending on whether or not that person has money or assets, it may or may not be worthwhile suing. However, if you son has filed for bankruptcy, the bankruptcy itself should discharge your son from the debt he owes on this loan.
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