What are my rights as a co-signer to a loan headed for divorce
I have been separated almost 1 year in March, I want a divorce. In good faith a few years ago I co-signed a loan to consolidate my husbands bills he accumilated and some bills with loan sharks without my knowing. Thinking lessons would be learned. I had no debt. I have since learned that he is 2 months behind on his bank loan, it is still within the branch and has not gone to collections. What do I do. I aqm raising his 2 kids, with little support or help from him, can they just come in the garnish my wages? Can I take the risk and claim bankrupcy, to get my name off the loan. I pay my bills every month. I am worried about being responsible for his mistakes for the next 8 years and having whether he has payed this months payment over my head. He does not have anyone to co-sign for him. I have tried. Please help. Can a lawyer help me out of this?
Posted from: Ontario
Essentially our rights in this situation are you are technically responsible for the loan, irrespective of what happens to your husband. So if he is not making payments, the creditors can focus their collection efforts on you not him. This can include garnishment, seizure of certain assets etc. Now you are able to deal with these debts in any way necessary, including a bankruptcy. This will effectively remove your name from the loan and leave him as solely responsible.
As for whether a lawyer can help you out of this predicament, they really won’t have much success if you clearly signed on all the debt in question. Even if a divorce order stipulates your husband must pay those debts they don’t have the ability to remove your name from the contract so if he fails to live up to the agreement, you would still be responsible.
At this point your best bet is to contact a local trustee.