If a co-signer is not notified that a loan is in default is the co-signer liable for all accrued fees? In this instance the co-signer thought the loan was paid and the delinquency is now more than 3 years old.
There is no requirement that a co-signer be notified of a default on a note. Often, the first time the co-signer knows of a problem is when the creditor approaches the co-signer to "make good" on the loan. For that very reason, we always suggest that a co-signer make it his or her business to keep up to date on the status of the loan in question.
You said that you thought the loan in your case was paid off and the note satisfied. Contact the creditor and state the facts as you understand them, and indicate you thought the loan had been paid off. Be prepared to provide copies of any documentation you might have received that led you to that belief.
It's possible that the creditor will agree to forgive some or all of the fees. If so, be certain to get that agreement in writing, signed by the creditor in case a new collector tries later to impress a boss by collecting on the old account.
BankingQuestions.com is a free service made possible by the generous support of our advertisers. Advertisers are not responsible for site content. Please help us keep BankingQuestions.com FREE by supporting our advertisers. When you see an ad for a product or service you may have an interest in, click through to learn more.
Accounts
Article
Q&A
Podcast
Video
Blog
Discussions
PDF
Powerpoint
There is no requirement that a co-signer be notified of a default on a note. Often, the first time the co-signer knows of a problem is when the creditor approaches the co-signer to "make good" on the loan. For that very reason, we always suggest that a co-signer make it his or her business to keep up to date on the status of the loan in question.