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Do I have to include a line of credit that I co-signed?

i cosigned for a line of credit for my son in 2004
i have never used the line of credit my self does this need to be included in a consumer proposal

Posted from: Ontario

One Response to “Do I have to include a line of credit that I co-signed?”

Doug Stuive, CA | Trustee | CIRP said...

When you file a consumer proposal you do have an obligation to disclose all of the debts that you are responsible for paying. This would include your son’s line of credit. That creditor has a right to participate in your consumer proposal even if you son is maintaining the debt. They cannot collect more than what is owed to them on the line of credit but they can apply payments received from your proposal against the balance owing on the credit line.

Sometimes when a creditor is getting payments from the primary borrower they will choose not to file any paperwork in the proposal and will opt out of receiving dividends. If they choose to do this your other creditors will receive a higher dividend from your proposal. However, even if they do decide not to participate you are still legally protected from future collection activity should your son default on the line of credit in the future.

Since it has been 10 years since you were required to cosign on the line of credit it may be possible to have your name removed from this account. I would recommend talking with your son to see if he is now in a position to take on the sole responsibility for this line of credit.