Wednesday, August 10, 2011

FAQ #2: If I have a co-signer, will their credit be affected?

A co-signer is an individual who is promising to repay a loan in the event the primary borrower defaults. If the primary borrower defaults (or files bankruptcy), the co-signer will be required to pay the loan back. As long as the co-signer repays the loan pursuant to the terms of the agreement, their credit will not be affected. However, many loans include an acceleration clause, meaning that if one of the borrowers files bankruptcy, the entire balance of the loan is due. If the lender exercises their right to accelerate the loan, the co-signer may not be able to make regular monthly payments.

If you don't see your question and would like more information please do not hesitate to call us at 508.655.5980, e-mail us, or attend one of our weekly Free Debt Relief Clinics.

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