When you agree to co-sign a loan, you can still sue the borrower for any reason — whether or not it’s related to the loan. The real question with any lawsuit is not whether you can file it but whether you can win. If you file a frivolous lawsuit, the borrower could come after you for attorney’s fees and court costs.

How do I get a cosigner release form?

The first step is to get in touch with your lender and ask about cosigner release. You can call your lender or customize and send one of these sample letters from the Consumer Financial Protection Bureau (CFPB).

How long does it take to get a cosigner off a loan?

If the conditions are met, the lender will remove the cosigner from the loan. The lender may require two years of on-time payments, for example. If that’s the case, after the 24th consecutive month of payments, there’d be an opportunity to get the cosigner off the loan.

Can I Sue the Borrower?? Cosigning for someone doesn’t mean that you give away your legal rights, so you can sue the borrower to recover the money you spent to pay their loan. Even if you win, your court costs may be more than the cost of the loan.

Can you sue someone for cosigning a loan?

Cosigning for someone doesn’t mean that you give away your legal rights, so you can sue the borrower to recover the money you spent to pay their loan. What this means is that you can file a lawsuit against the primary borrower — but will you win the lawsuit? Even if you win, your court costs may be more than the cost of the loan.

Can you sue the primary borrower of a loan?

Yes. Your co-signature on the loan is like an insurance policy for the lender. By paying the loan you “step into the shoes” of the lender. That gives you the right to sue the primary borrower on the loan.

Can a borrower Sue you for breach of contract?

If you have a separate contract with the borrower in which he promises to repay the loan, you can sue him for breach of contract if he defaults. One way to protect yourself from lenders is to ask the borrower to indemnify you when you sign the loan.

What happens if you co-sign a home loan?

When you co-sign a loan, you’re essentially taking the loan on as if it was your own. It will go on your credit report, and the lender will come after you if the borrower doesn’t pay. Co-signing a loan doesn’t remove your legal rights, though, and you can sue the borrower for any legitimate cause of action.