If the person you co-signed for missed payments, the lender may be able to require you to pay, and the missed payments may affect your credit. Contact the lender or servicer promptly to confirm the account status and amount due, then review your signed agreement before deciding how to respond. Your rights and the lender’s remedies depend on the loan, contract, and state law.
What co-signing means when payments are missed
Co-signing can make you responsible for repaying another person’s debt. For covered loans, a creditor may be able to seek payment from you without first trying to collect from the borrower, although state law or the contract may affect that. The FTC’s required Notice to Cosigner puts it plainly: “If the borrower doesn’t pay the debt, you will have to.” That wording describes potential liability; your signed agreement and applicable law determine your actual obligations. See the FTC’s co-signer guidance and its Credit Practices Rule guidance.
The loan may appear on your credit reports, and late payments or default can affect your credit history. Co-signing does not, by itself, give you ownership of the financed property. For example, being responsible for a car loan does not necessarily make you an owner of the vehicle.
What to do first
- Contact the lender or servicer using a verified contact channel. Ask for the current balance, missed installments, fees, due dates, and whether the account is delinquent or in default. Ask what options are available to bring it current or resolve the default. Do not assume the borrower has given you the full account history.
- Get the documents and account history. Locate the signed loan agreement, payment history, notices, and any terms specific to co-signers. Check how the agreement defines your responsibility and whether it describes release from the loan or other relevant procedures.
- Speak with the borrower, but verify any proposed plan with the lender. Find out what happened and whether the borrower can make payments. Base decisions on confirmed account information, not an informal promise alone.
- Check your credit reports. Look for the account’s status and any inaccurate entries. If information is wrong, dispute it with the lender or servicer that furnished it and with the credit reporting companies. The FTC explains co-signer credit reporting and disputes.
- Keep records of every contact and payment. Save notices, account statements, emails, and notes of calls, including dates and names. If you are asked to pay or settle, compare the written account information with your contract; ask how a payment will be applied and what confirmation you will receive.
What can happen depends on the loan
General consumer loans
The creditor may use collection methods against a co-signer, potentially including a lawsuit, and fees or collection costs may add to the amount owed. Whether the creditor must first seek payment from the borrower can depend on state law and the agreement. Read the contract and check state-specific rules rather than assuming every loan follows the same process. The FTC co-signer FAQs explain these general risks.
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Auto loans
If the vehicle loan defaults, the lender may repossess and sell the car; state law may also allow a lawsuit for a remaining balance after the sale. A co-signer is financially responsible but may not have the same rights to the vehicle as the primary borrower. Ask the servicer about the account and consult state-specific resources if repossession or a remaining balance is at issue. The CFPB’s auto-loan guidance was last reviewed September 12, 2023.
Private student loans
For a private student loan, a co-signer has financial responsibility, and missed payments can affect both the borrower’s and co-signer’s credit histories. The lender may refer the debt to a collection agency or sue. Some lenders offer co-signer release after specified requirements are met; ask the servicer for the written eligibility criteria rather than assuming release is available. The CFPB’s default guidance was last reviewed March 27, 2024; additional information is available in its student-loan co-signer guidance.
Do not assume federal student-loan rules or remedies apply to a private student loan. The steps and consequences depend on the actual loan type and contract.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.If a debt collector contacts you
Write down the collector’s name, the debt information, and important dates. Ask for written information about the debt and compare it with your loan records. The Fair Debt Collection Practices Act limits the conduct of certain debt collectors for covered debts; some state laws also cover original creditors. Coverage depends on the facts, but harassment and false statements are unlawful in situations covered by those rules. Read the CFPB’s debt-collection guidance.
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If you receive court papers, do not ignore them. Deadlines and procedures vary by jurisdiction and case, so seek state-specific legal help promptly. The same applies if a collector threatens garnishment or you need to understand what property or income may be protected in your state.
Can you get out of the co-signed loan?
Do not assume you can remove yourself simply by asking, or that the borrower’s promise to refinance releases you. For a private student loan, some lenders offer release under specified criteria; ask the servicer for the exact written requirements and whether the account qualifies. For other loans, review the agreement and ask the lender what, if any, release or refinancing options apply. Until the lender confirms a change in writing, treat your existing contractual obligations as still in effect.
How common is it for co-signers to pay?
The CFPB reports that one quarter of co-signers in a 2019 survey made at least one payment because the primary borrower failed to pay. The CFPB page does not identify the original survey publisher, so this figure should be understood as the CFPB’s account of that survey, not as a CFPB-conducted survey. It illustrates why a co-signer should respond to confirmed account information rather than wait for the borrower to resolve the issue alone.
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