Once upon a time, you were being an amazing friend, parent, spouse, whatever the case may be and you cosigned a loan to help them out. It was the nice thing to do at the time. However now, you are estranged, you don’t want to be on their loan because you don’t trust their ability to pay or it’s affecting your ability to get credit somewhere else, and you have to figure out how to be removed. Is it easy? Can it be done? Here is some information.
Cosigners are those that are allowing financial institutions to use their credit as a basis for offering someone else either a loan, credit card, etc. If the primary loan holder doesn’t make payments, defaults on the loan, has a repossession, it is now your responsibility to handle it as the cosigner. That is what you agreed to. So when you want to no longer be part of that there are steps that need to be taken.
How to Get Removed from the Obligation
If it’s a CREDIT CARD, this may be easy. The initial borrower should see if they are able to now get a credit card in their own name with a 0% balance transfer offer. Once they transfer the balance to the new card (that doesn’t have your name on it), they can go ahead and close out the other card, there by letting you off the hook. Also you can just ask the issuer if you can be removed, especially if there is no balance on the credit card.
For LOANS, there are generally options to release the loan. That is highly dependent on on-time payments and a credit check because the initial borrower does have to be financially able to handle the loan on their own. You can also look into refinancing or consolidating; because that will allow the borrower to get a new loan (which is what this entails) in order to get everything in just their name.
When it comes to HOUSING that’s a whole other ballgame as you and the tenant have to speak with the landlord or agency that holds the apartment and also they might not actually be able to remove you until the lease is up. At that time you can refuse to be a cosigner which will remove you from that obligation.
Now you can’t force anyone to do this. If you are a cosigner, you initially signed on for the long haul, until the debt is free and clear and paid off, or you pay it off, whichever comes first. Hopefully you have considered this before you signed and you believe the person will take care of the payments without affecting your credit down the line. In the future you just want to remember that co-singing, while it may help the person you are doing it for at the current moment, can be a recipe for disaster if you are forced to pay off the debt because they can’t.
When It’s a Bad Idea to Have a Cosigner
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