What can I do if a home I co-signed for is going into foreclosure? 16 Answers as of June 24, 2011

I co-signed for my parents house when I was 21 or 22. They are now divorced and the house is going into foreclosure.. Can I do anything legally about this to stop it from ruining my credit, or am I just doomed?

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Jackson White, PC
Jackson White, PC | Spencer Hale
If all you care about is your credit then you can pay the bill. The bad news is your credit is probably already shot because of all the delinquent payments.
Answer Applies to: Arizona
Replied: 6/24/2011
Cartwright Law Firm
Cartwright Law Firm | Andrea Cartwight
You can try and sell the property on a short sale to avoid a foreclosure from appearing on your credit. If you are trying to keep the home you can attempt a loan modification or if all else fail you may want to consider filing for bankruptcy protection. It is important that you seek legal counsel prior to the property actually being scheduled for auction. Once the home has been sold, then your legal options are diminished. If you should have any further questions or concerns, please feel free to contact me.
Answer Applies to: Michigan
Replied: 6/23/2011
Daniel Hoarfrost, Attorney at Law
Daniel Hoarfrost, Attorney at Law | Daniel Hoarfrost
Legally, you have a right of redemption, which means you have the right to pay off the mortgage.Financially, that's probably not very workable. As to the effects on your credit, you always have the right to enter an explanation in the credit file that it wasn't your primary debt, that your liability was created through a co-sign/ guaranty situation.
Answer Applies to: Oregon
Replied: 6/23/2011
Breckenridge and Walton
Breckenridge and Walton | Alan D. Walton
You can pay the loan as you agreed to do. If you do not, then your credit will reflect that you failed to do so. You are not doomed, but you will have to wait a few years before this event becomes meaningless to potential creditors.
Answer Applies to: Michigan
Replied: 6/23/2011
Burnham & Associates
Burnham & Associates | Stephanie K. Burnham
Co-signing, Guaranteeing or otherwise accepting liability for a debt will certainly make you feel doomed. Especially if you do not want to catch up on the payments or pay any deficiency. You may want to speak with an attorney about your options.
Answer Applies to: New Hampshire
Replied: 6/23/2011
    Law Office of Maureen O' Malley
    Law Office of Maureen O' Malley | Maureen O'Malley
    The creditor will now look to you for payment, unfortunately, or may just place it on your credit report. You could put a note there saying you're a co-signer and the primary holder is in bankruptcy. You could also file bankruptcy, if there are other matters making it worth your while. (Though this will leave a significant debt in itself.)
    Answer Applies to: Virginia
    Replied: 6/23/2011
    CONSUMER PROTECTION ASSISTANCE COALITION, INC. (DE).
    CONSUMER PROTECTION ASSISTANCE COALITION, INC. (DE). | Gary Lee Lane
    if owner agrees, you can sue the lender.
    Answer Applies to: California
    Replied: 6/23/2011
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    Sorry.... it will affect your credit. Hopefully there will not be a deficiency judgement. You need to see a lawyer in your state to ascertain if that is possible. In some states the lender can come after the borrowers for the difference between what is owed and what it sells for. In California if there is a non-judicial foreclosure, (and the loan was a purchase money loan) there is no deficiency.
    Answer Applies to: California
    Replied: 6/23/2011
    Theodore N. Stapleton, PC
    Theodore N. Stapleton, PC | Theodore N. Stapleton
    You could file bankruptcy to stop the foreclosure and discharge any unsecured deficiency after the foreclosure. Please call to discuss.
    Answer Applies to: Georgia
    Replied: 6/23/2011
    Indianapolis Bankruptcy Law Office of Eric C. Lewis
    Indianapolis Bankruptcy Law Office of Eric C. Lewis | Eric Lewis
    Not much you can do unless you can take over the mortgage yourself and see it through to the end.
    Answer Applies to: Indiana
    Replied: 6/22/2011
    Bankruptcy Law office of Bill Rubendall
    Bankruptcy Law office of Bill Rubendall | William M. Rubendall
    Being a co-signer creates a legal obligation to pay the debt when the primary signer does not. If it is not paid you may be subject to a lawsuit as well as negative creditor reporting.
    Answer Applies to: California
    Replied: 6/22/2011
    Evan M. Altman Attorney at Law
    Evan M. Altman Attorney at Law | Evan M. Altman
    You could discharge the debt in CH 7.
    Answer Applies to: Georgia
    Replied: 6/22/2011
    Bird & VanDyke, Inc.
    Bird & VanDyke, Inc. | David VanDyke
    You are responsible for the debt. That is why you signed on the loan.
    Answer Applies to: California
    Replied: 6/22/2011
    The Schreiber Law Firm
    The Schreiber Law Firm | Jeffrey D. Schreiber
    You can save it only by bringing the payments current and keeping them current. However, in some states there are anti-deficiency laws which protect you form any amount owed after foreclosure. You would need to consult an attorney to determine if you live in one of those states.
    Answer Applies to: California
    Replied: 6/22/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    It will appear on your credit. A bigger worry will be are they going to sue you for a deficiency. I would suggest you sit down with a lawyer.
    Answer Applies to: Georgia
    Replied: 6/22/2011
    Financial Relief Law Center
    Financial Relief Law Center | Mark Alonso
    If you are a signer on the loan you are liable and it will affect your credit. You may be able to modify the loan so they can continue to make payments or you could elect to short sale it to mitigate the damage to your credit. Foreclosure will bring the most damage to your credit.
    Answer Applies to: California
    Replied: 6/22/2011
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