Will my foreclosure affect a co-signor? 16 Answers as of July 25, 2011

I co-signed for my sisters house & gave her a $25K gift when purchasing. Now I am foreclosing on my OWN house (different house) can this affect her?

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Financial Relief Law Center
Financial Relief Law Center | Mark Alonso
No, if I understand correctly, you co-signed on your sister's home and now you are losing your home to foreclosure. If that is the case, the foreclosure on your own home would not impact your sister's situation on the home you co-signed for her. The only way it may is if you were listed on the title on your sister's home and if your current lender who is foreclosing on your property is able to pursue a deficiency judgment against you. If so, then they can take further actions to recover from you which may include placing a lien against other property/ assets you own. But, if you're a co-signer on her loan and have no ownership in her property, and if the home you own that is being foreclosed upon is not using judicial foreclosure or otherwise cannot pursue a deficiency judgment, then this should not impact your sister.
Answer Applies to: California
Replied: 7/25/2011
Theodore N. Stapleton, PC
Theodore N. Stapleton, PC | Theodore N. Stapleton
It depends upon whether your mortgage company confirms the foreclosure sale and pursues you for a deficiency then it might affect your sister.
Answer Applies to: Georgia
Replied: 7/25/2011
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
Yes, they take a hit on their credit report just like you will. That is the purpose of a co-signor, so the lender has 2 parties to go after.
Answer Applies to: California
Replied: 7/25/2011
Dearbonn Law Offices
Dearbonn Law Offices | Ajibola Oluyemisi Oladapo
Absolutely, your foreclosure will affect a co-signor. A co-signor is essentially pledging to be responsible for your debts if you default. In this case you are foreclosing, so the co-signor is responsible.
Answer Applies to: Washington
Replied: 7/24/2011
Bankruptcy Law office of Bill Rubendall
Bankruptcy Law office of Bill Rubendall | William M. Rubendall
If you are a co-signer on a property you are liable for payment on the loan. If you have other property it is not liable for the loan.
Answer Applies to: California
Replied: 7/24/2011
    Law Offices of Daniel Moulton
    Law Offices of Daniel Moulton | Daniel Moulton
    A co-signor is only responsible for debts for which she co-signed.
    Answer Applies to: Illinois
    Replied: 7/24/2011
    Tucker Legal Clinic
    Tucker Legal Clinic | Samuel Tucker
    As long as sister is able to handle her payments your foreclosure should not affect her.
    Answer Applies to: Mississippi
    Replied: 7/24/2011
    Mauritz Van Niekerk, Attorneys at Law
    Mauritz Van Niekerk, Attorneys at Law | Christiaan van Niekerk
    Generally NO but they do look back to see if you preferred one creditor to another especially family. Consult with a Bankruptcy Attorney.
    Answer Applies to: New York
    Replied: 7/24/2011
    Indianapolis Bankruptcy Law Office of Eric C. Lewis
    Indianapolis Bankruptcy Law Office of Eric C. Lewis | Eric Lewis
    No, it should not affect her mortgage. You said you co-signed on her mortgage, but I assume you are not on her deed because if so, your foreclosure could result in a lawsuit and that could implicate any asset(s) that you have down the line.
    Answer Applies to: Indiana
    Replied: 7/24/2011
    The Law Offices of Mark Wm. Hofgard, Esq.
    The Law Offices of Mark Wm. Hofgard, Esq. | Mark Hofgard
    If I understand this correctly, you co-signed for your sister's loan and this is not in foreclosure. However, a different property is subject to foreclosure. A creditor may only foreclose on collateral (a property) that is named in the deed of trust. If the second property is not collateral for the loan with your sister, this should not affect your sister.
    Answer Applies to: Colorado
    Replied: 7/23/2011
    The Law Office of Mark J. Markus
    The Law Office of Mark J. Markus | Mark Markus
    First of all, foreclosure is a creditor remedy. You can't foreclose on your own house. You don't indicate whether or not you are on title to your sister's house, but I will assume you are. The foreclosure on a separate piece of real property will not affect her property. If you file bankruptcy, however, then it may affect her property although there's nowhere near enough information to make that determination here.
    Answer Applies to: California
    Replied: 7/23/2011
    Melinda Murphy Dionne, PC
    Melinda Murphy Dionne, PC | Melinda Murphy Dionne
    The foreclosure on your home( for which your sister is not obligated) should not impact on your sister's ability to continue paying her mortgage. Your details mention a $25,000 gift to your sister when she purchased her home. This gift COULD cause problems for you and/or your sister if you filed a bankruptcy case. You should immediately seek the advise of a qualified bankruptcy attorney who can discuss these matters with you.
    Answer Applies to: Alabama
    Replied: 7/23/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    Your post doesn't make sense. You can't foreclose on your own house. Only lenders can foreclose.
    Answer Applies to: Georgia
    Replied: 7/23/2011
    Florio Law Firm, PLLC
    Florio Law Firm, PLLC | Amber Morgan Florio, Attorney at Law
    A foreclosure on your home will affect your property only.
    Answer Applies to: Texas
    Replied: 7/23/2011
    Law Office of Maureen O' Malley
    Law Office of Maureen O' Malley | Maureen O'Malley
    Not if she's not the co-signer on the foreclosed house.
    Answer Applies to: Virginia
    Replied: 7/23/2011
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