Q: Can I sue for monetary compensation?
I cosigned a car loan for a friend. He defaulted the car loan and the bank handed the loan to a collection agency. I had to declare bankruptcy which destroyed my once stellar credit score. As a result I'm strained financially and am still recovering my credit score. I am unable to get any credit cards or and I am unable to secure a student loan for school so my education also had to be postponed. I am worried that this will prevent me from getting any kind of financial help when it comes to going to school or getting a home a decade from now. I was trying to pursue a nursing major now I have to pay for things out of pocket which is something I cannot afford!
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A:
In general, a co-signor agrees to share liability for a debt with the co-debtor. A default by a co-debtor is often considered a default by the co-signor as well.
Did your friend use your information to apply for the loan without your consent? Did you willingly co-sign for your friend?
Given the facts you presented, I am unable to determine all of your options. In order to determine if there are legal grounds upon which you can sue your friend and be monetarily compensated, you'll need to seek the advice of a knowledgeable attorney in California.
I'm sorry to hear about this unfortunate situation.
Tim Akpinar and Yelena Gurevich agree with this answer
A: No. There is no cause of action.
A: Unfortunately, doing a favor for a friend does not always benefit you - particularly where financial issues are concerned. Had you ended up paying for the loan, you may have had a claim against the co-signer friend for indemnification for having to pay the loan. Being unable to do that, a bankruptcy was probably your best option you had to resolve the debt. As you move forward, there are things you can do to help repair your credit - you may want to look into getting a secured credit card from your bank. Put some money in a savings and the credit card is secured by those funds - as you borrow and pay back the money borrowed, you will have positive reporting on your credit. Bankruptcy does not always eliminate your ability to get student loans.
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