If you have decided that co-signing a loan for a loved one wasn’t a good idea, you’re probably experiencing co-signers' regret. Removing your name from a co-signed loan won't be easy. For some debts, it may not even be possible. Show
Co-signing a loan or credit card basically tells the bank that you’re willing to make payments if the other person doesn’t. It also means the bank can pursue you for payment even if the other person files bankruptcy or dies before the debt is paid. By co-signing a loan, you assume responsibility for the debt just as if it were yours alone. As a general rule, lenders won’t remove your name from a co-signed debt unless the other person has demonstrated they can handle the loan on their own. You never would have been asked to co-sign if the other borrower had shown this ability from the beginning. If things have changed since then, the lender definitely will want proof. Removing Your Name From a Co-Signed LoanIf you co-signed for a loan and want to remove your name, there are some steps you can take:
Removing Your Name From a Credit CardA credit card issuer may willingly remove your name from a credit card account if there’s no balance on the card. However, if there is a balance, you’ll have to pay it off before you can make these types of changes to the account:
Removing Your Name From a Forged LoanWhen a loved one has forged your signature on a loan, it puts you in a tough spot. You don’t want to be held liable for a decision you never made, but you also want to avoid having your loved one be arrested for forgery or fraud—something that could happen if you blow the whistle to get yourself off the hook. NoteExperian, one of the three credit bureaus, recommends reporting a forged loan to the Federal Trade Commission as identity theft. Lenders won’t remove your name from a forged loan unless you report the forgery to the police or give them a signed affidavit including the forger's admission of guilt. Both put your loved one at risk of legal action. If you don’t let the lender know of the forgery soon after you find out, your silence could be interpreted as an acknowledgment. In short, to be liable for the loan unless you are willing to report your loved one's crime. Protect Your CreditIf you can’t get the lender to remove your name from a co-signed loan or credit card balance, your best option is to at least keep up the minimum payments until the balance is paid off or until the other borrower can get the account in their own name. Co-signing may not become an issue unless the other person isn’t keeping up with the payments, so get into the habit of checking the payment status, especially in the days leading up to the due date, on the due date, and the date after. Don’t wait too long because late payments go on your credit report after 30 days. Frequently Asked Questions (FAQs)Who can co-sign a loan?Generally, anyone with a good credit score and the ability to repay your loan can be a co-signer. In most cases, a parent or other close relative is the most likely co-signer, but it doesn't have to be a family member. How do I find out if my co-signed loan is defaulted?You should always monitor your credit report for any red flags, and that's especially true if you have co-signed on a loan. If the person with whom you've co-signed is more than 30 days past due, it may show up as a negative mark on your credit report. What happens when the primary owner of a co-signed loan files for bankruptcy?When someone files for bankruptcy, any co-signers on their debt may or may not be protected, depending on the type of bankruptcy. In a Chapter 7 bankruptcy, co-signers are still on the hook for the debt. In a Chapter 13 bankruptcy, however, co-signers are at least temporarily protected during the initial stay while the bankruptcy case is examined. If the primary owner negotiates a lower debt payment, the creditor may seek to collect the rest from co-signers. Can I remove myself from a cosigned vehicle?To get a co-signer release you will first need to contact your lender. After contacting them you can request the release — if the lender offers it. This is just paperwork that removes the co-signer from the loan and places you, the primary borrower, as the sole borrower on the loan.
Can you back out of a cosign?Yes, it is possible to get out of a loan if the primary borrower agrees to a cosigner release. All lenders have different criteria for cosigner release, but in general, the borrower will have to demonstrate that they have the credit or repayment history needed to qualify for the loan on their own.
How can I get a cosigner release?How Can I Release My Co-Signer?. Make 24 months of consecutive on-time, full payments for private student loans—only 12 months required for refinance loans.. Ensure your account isn't delinquent.. Provide proof of income and pass a credit review, showing you can assume the full responsibility for repayment.. Can you take your name off a co signed car loan?If you cosigned for a loan, one of the quickest routes out is to apply to the lender for a cosigner release. This lets the cosigner off the hook, so that only the primary borrower is the one listed on the loan going forward.
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