- Oct 14, 2020
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If you hadn't of made that payment then they would have started to foreclosure. Banks are not stupid, they know that they can't get blood from a stone. They wouldn't have gone after your daughters assets because she probably didn't have any. They would have repossessed the car and gone after you for any differences.This is not correct... I can only speak from my own personal experience on this.
When my daughter was still in high school she had saved up a little over $500 for a used car to which I was going to match.
Put in looking at what we could get I just could not see my little girl driving around in a POS car.
So we got her a new car to which (against every ones advice) I Co-signed for.
about 3 years in and after she had moved out of the house, I get contacted that she was 90+ days behind in payments.
Which hit her credit score hard... I had 30 days to make it current before it would start hitting my credit score.
So no it does not effect both parties equally unless it keeps going unpaid.
In the case of Maya's student loan they don't even have to wait for a late payment, as soon as they discover that the funds are not being used for tuition they will void the loan and try to recover it, by going after the co-signer. Sure Maya's credit rating would take a hit but, credit isn't that difficult to re-establish. Maya would just have to get a job (admittedly a great difficulty for her, but maybe the Pink Rose is hiring?) and live on a budget.