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Can a Cosigner Remove Their Name from a Debt?

About Debt

When you are agreeing to cosign on a loan for someone, you are pretty much taking on the responsibility of that loan. This means if something should happen to the other person or they are unable to pay the loan you will have to take financial responsibility. Therefore this should be a well thought out decision before you agree to do it. Being a cosigner on the loan is the same as being the main person on the loan. There aren’t any special clauses that say the co signer is exempt from certain responsibilities.

The reason a person needs a co signer is because the lender felt as though the borrower would not be able to handle the financial responsibility of the loan by themselves. Therefore they require someone else who will step up and agree to assist the borrower with satisfying the loan. By filling out the application and agreeing to the terms of the loan the cosigner is agreeing to take on full responsibility of the loan should the primary borrower default on the loan. This means that if something happens and the primary borrower and the cosigner choose not to meet their obligations this incident will be placed on both parties credit report.

If a cosigner feels that they would like to no longer be accountable for the loan there is process that must take place. The cosigner must first alert the primary borrower of their decision and the both of them must contact the lender. The lender will then ask the primary borrower to fill out another application and go through the credit approval process again. If the creditor feels the primary borrower is now fit to meet the obligations of the loan they will release the cosigner from the agreement and give the primary borrower full responsibility for the loan. However if the creditor still feels uncertain about the primary borrowers ability to meet all of the obligations of the loan by themselves they will require the cosigner to remain on the loan.

This process can become very frustrating to a cosigner who no longer wishes to remain obligated to a loan they are not using, however this should be thought about before ever agreeing to become a cosigner. When you are cosigning on a loan you are basically agreeing to pay for a loan that will purchase something you will not be able to enjoy. This is a very considerate thing to do however it could put you in a bind should the primary borrower be unable to meet the obligations of the loan. Even if you feel confident in the primary borrowers ability to make timely payments and eventually payoff the loan, you never know what the future holds. And if something unexpected should happen you will be expected to take up the slack until things change for the primary borrower. Therefore thinking two or three times before you decide to be a cosigner for someone is definitely a good idea and a very smart choice.

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