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Be Careful Who You Co-Sign With

Posted By Jim On 11/08/2010 @ 12:17 pm In Credit | 12 Comments

When I first moved to Maryland for work, I rented an apartment with a friend of mine. He was a good roommate and a great friend, so much so that we even discussed buying a house together. We never got past the discussion phase because my parents recommended against it when I brought it up. His did as well. Since then we’ve looked back on that moment as a fantastic time to start taking our parents advice because buying a home with someone, regardless of who it is, can be a very tricky proposition.

That said, we are often put in situations of far lesser magnitude where we might be tempted to co-sign an agreement with someone. You might be asked apply for a joint credit card [3] or co-sign a loan, I would be very careful about who you agree to do that with. In fact, I am pretty sure I will never co-sign a loan with anyone other than my wife.

The problem is that you often enter these arrangements on sunny days, never thinking about when there will be a thunderstorm… and storms often come sooner and harder than you think.

Here’s a story from a reader:

This article [3] bought up an unpleasant memory for me and my future wife. We are both divorced. When her settlement was made she took a credit card and he took one and they were to both by divorce decree to pay off the one they took. She has paid her’s off and he still is adding to his. we contacted the credit card company on this matter and they won’t release her from it even though the divorce clearly states he is responsible for that debt. So far he hasn’t been late enough for the card company to take any action. My question is how does she get her name off of the card. She fulfilled her responsibility and he is still holding this over her head five years later. Any advice would be great. So far the credit card company or the one attorney she has asked about it say as long as he is paying on it he can do so as he pleases. She just wants her name off the card and the credit card company said it didn’t matter what the divorce says, she is a co holder of the card.

I think this would be a great article to help out plenty of people before it happens to them.

Sadly, she’s still on the hook because she’s the one on record. You might be able to get a court order to change that but short of that, she’s still responsible. I’m not a lawyer so I don’t know how you go about doing that but sadly these are the storms.

Be careful who you co-sign with.

(Photo: seishin17 [4])


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[3] joint credit card: http://www.bargaineering.com/articles/joint-cardholders-building-credit.html

[4] seishin17: http://www.flickr.com/photos/seishin17/3216147097/sizes/m/

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