East Orange: 973-677-9000
Paterson: 973-247-9445
Jersey City: 201-659-6226
Toll Free: 888-827-5493
FREE Initial
Consultation Se Habla Espanol
Go to Practice Area Categories

Co-signing a loan may jeopardize the ability to protect assets

Out of concern, sympathy or love, some New Jersey people agree to co-sign a child or other family member's loan. While such an action can be admirable, it is not necessarily smart. Many parents have failed to protect assets after co-signing a child's student or car loan. Knowing that a co-signer typically has a stronger financial standing, creditors tend to go after them rather than the primary borrower.

In a survey conducted among individuals who co-signed loans, it was determined that almost 40 percent had to take responsibility for paying a portion or all of the loan because the primary borrower failed to. The credit scores of a large percentage of co-signers showed a significant drop, and the relationships between borrowers and co-signers deteriorated in more than a quarter of the cases. Before co-signing, a person would be wise to consider whether risking a valued relationship and financial health is worth it.

If the primary borrower fails, or refuses, to maintain payments on the loan, the lender has the right to go after the co-signer. The lender will know that the primary borrow likely has insufficient or even bad credit, hence the reason for the co-signer. It was reported that most of the cases that led to lenders going after co-signers involve students failing to pay their loans.

New Jersey parents who are being held responsible for debts of a child for whom they co-signed a loan may benefit from discussing their dilemma with an experienced bankruptcy attorney. After assessing the circumstances, the lawyer can explain the available remedies. Instead of the co-signer being forced into bankruptcy, it may be appropriate for the primary borrower to file for Chapter 13 bankruptcy. Under the U.S. Bankruptcy Code, the co-signer may be able to protect assets and receive some level of protection.

Source: post-gazette.com, "Co-signing a loan? Consider the risks", Tim Grant, June 9, 2016

No Comments

Leave a comment
Comment Information


Tell Us About Your Case

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.



  • NACBA | National Association of Consumer Bankruptcy Attorneys
  • NACA | National Association of Consumer Advocates
Review Us
Goldman & Beslow, LLC

Goldman & Beslow, LLC is a Federal Debt Relief Agency by an Act of Congress. We have proudly assisted consumers seeking relief under the U.S. Bankruptcy Code for over 38 years.

FindLaw Network

qr code

7 Glenwood Avenue,
Suite 311B
East Orange, NJ 07017
East Orange Law Office

Phone: 973-414-8069
Phone: 973-419-7631
Phone: 973-419-5266
Phone: 201-205-2496
Toll Free: 888-827-5493
Fax: 973-675-5886
E-mail the firm

NEWARK OFFICE 168 Bloomfield Avenue
Newark, NJ 07104
Newark Law Office

Phone: 973-483-1333
Phone: 973-419-5266
Phone: 201-205-2496
Toll Free: 888-827-5493
E-mail the firm

PATERSON OFFICE 100 Hamilton Plaza,
Suite 405
Paterson, NJ 07510
Paterson Law Office

Phone: 973-247-9445
Phone: 973-419-5266
Phone: 201-205-2496
Toll Free: 888-827-5493
E-mail the firm

JERSEY CITY OFFICE 26 Journal Square,
Suite 603
Jersey City, NJ 07306
Jersey City Law Office

Phone: 201-659-6226
Phone: 973-419-5266
Phone: 201-205-2496
Toll Free: 888-827-5493
E-mail the firm

Back to Top