If a friend or family member asked you to be a co-signer, you should think about it very carefully.. It is not only giving your name to be registered in the bank and allowing your relative to approve the credit; it carries a series of serious responsibilities that, if breached, can damage your credit life and even lead to foreclosures.
(In context: What are the implications of appearing as co-signer of a debt?).
What is being a co-signer?
It is a legal figure that allows the bank or whoever is going to make a loan (creditor) to have sufficient guarantees to disburse, as explained by the lawyer Elkin Jurado, in a past talk with EL TIEMPO.
The holder (debtor) is required a co-signer, depending on the amounts or type of credit, to be more sure that he will pay.
Many of the loans require a co-signer.
“Being a co-debtor is in the same position as the debtor. It works as a guarantee for the creditor, who is completely free to demand payment of the debt. It can seize because it responds with all the assets of the estate,” he added.
Being a co-debtor (without ‘dying’ in the attempt)
The first thing you should analyze is who asked him to be a co-debtor. The specialized firm Datacrédito Experian recommends verify very well “the debtor’s job stability and his level of trust in obligations.” That is, investigate if the person has a way to comply with the payment.
(Keep reading: How to manage debts if you can’t pay them? Here we tell you).
As the lawyer Elkin Jurado explained to this newspaper, ultimately the bank or creditor is not interested in knowing if the debtor and co-signer are friends, relatives, acquaintances… What matters is that they hit on time.
The co-debtor can acquire the same obligations as the debtor.
Andrea Moreno. TIME
It also depends on what “interest” you have in the credit.
“It’s a personal decision. The recommendation to assume being a co-debtor would be that you are willing to pay or assume the obligation for that person. For example, a debt from my son, brother or wife would morally motivate me to be a co-debtor,” said the lawyer.
What happens to your credit history when you are a co-signer?
As mentioned, the co-debtor acquires the same obligations as the debtor. If the debtor does not pay, then the obligation falls on the other person.
“It affects the credit history because the two are in the same order. The negative report for delinquency in the debt affects them both. It must also be taken into account that, since you are assuming the potential payment of the credit, the indebtedness capacity is affected” he added.
(It may be of interest to you: Keys to paying debts and surviving credit card interest).
In extreme cases, the bank or creditor may proceed to seize the debtor’s assets. If it is not “satisfied from the legal point of view”, the balance of the debt can be collected from the co-signer.
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2023-08-01 04:05:40
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