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As many have adviced here: https://money.stackexchange.com/q/66311/32249 , but no one did so far, I'll ask it over here, as I'm curious aswell:

All I read is "Co-signing is the same level of risk, as giving the loan from your own money." But if it is my own money and I lent the money, I could sue the person if they would not pay as it was negotiated.

Is this given for co-signing aswell? Can I sue someone for the financial damage I took due to co-signing their loan?

Or does this depend on the circumstances making him not able to pay(in which case I would consider this even worse compared to giving the loan by yourself)?

@the comment, notifying me that I can sue anyone for anything: I was assuming it is implying that I'm asking about this beeing appropiate in respect of law. Not that I'm asking about beeing physically able to file it.

If this is widely location dependent, assume it to be as tagged, but a common answer is prefered if possible.

  • You can sue anyone for anything. So, you are asking the wrong question. The real question is, can you win? I found this article, this other article, and finally this one that may be of help. – mikeazo Jun 22 '16 at 12:44
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    As for "Co-signing is the same level of risk, as giving the loan from your own money." But if it is my own money and I lent the money, I could sue the person if they would not pay as it was negotiated., that all depends, right. As a co-signer, you agreed to pay the loan. Did you make any separate agreements with the borrower that by them not paying you can exercise? Did the borrower agree to give you the property upon them not being able to pay? Did the borrower agree to repay you anything they weren't able to pay? Cosigning without such agreements seems in fact, more risky. – mikeazo Jun 22 '16 at 12:46
  • I was assuming it is implying that I'm asking about this beeing appropiate in respect of law. What is your question? Of course it is appropriate with respect to the law for you to sue the borrower. You can sue anyone for anything. Are you asking us to say whether or not you will win? – mikeazo Jun 22 '16 at 16:31
  • @mikeazo: If you want to play this game... ok: No of course I don't ask you if I will win. Asking you that, would require I'm expecting to talk to legit fortune tellers.... Also I'm not asking if I can do something that is a subset of anything.... than I had asked it on philosophy se.... But I asked it (beeing well aware) on law.se so I'm (IMHO obvisiously) asking, about a law.... About a law that in any way says the borrower has to compansate me in the mentioned case. And concluding a sue beeing justyfiable.... and NO by justifyable I don't mean able.... – Zaibis Jun 22 '16 at 17:07
  • You have no idea how helpful your last comment is. I'm sorry if it seemed like I was being pedantic. I was not trying to be, but trying to drill down to the crux of your question. – mikeazo Jun 22 '16 at 19:32
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From a legal perspective co-signing a loan isn't the same thing loaning the money to the other co-signer. When you co-sign a loan with someone else both you and the other person are equal parties in the loan, both jointly responsible in fully paying off the principle and interest. If loan is defaulted on, the bank can pursue legal remedies to try to recover its money against either or both of you.

If you end up having to pay part or all of the loan, then whether or not you can recover any of that money will depend on whatever agreement you made with the other person. Given that you probably wouldn't a have a signed written agreement with the other signer in case like this, it'll probably come down to whether or not you can prove (on the balance of probabilities) that the other party promised to you to pay off the full amount of the loan. It will help if the loan is specifically tied to a car, a house or other property that the other party benefits from but you don't.

Note that you'd have to give serious consideration to whether the other party can actually pay the amount owed. There's no point going to court to obtain an unenforceable judgement.

I also should say that from a financial perspective it does make some sense to think of it as if you were loaning out the money yourself. While there's a big and significant difference between the two, in that your bank account isn't affected unless the other person defaults, if they do the result is going to be pretty much the same. Indeed in that case it's not much different than just giving the other person the money. When co-signing a loan you really need to trust that other person.

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From the comments.

I'm (IMHO obvisiously) asking, about a law.... About a law that in any way says the borrower has to compansate me in the mentioned case.

No, there is no such law.

The contract that you two signed was with the lender. So from the prospective of that contract, you two are co-equals. The two of you would have to have entered into a separate agreement to legally change that relationship. If you did that, you would have to use whatever terms are in that agreement to settle this. If there was even some sort of verbal agreement between you and the friend, and you wanted to sue based on that, you could. At that point, it would be your word against your friend's in court, and I could not tell you how a judge would respond to that. A local lawyer in your area might have an idea based on recent cases.

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