Life Event: Cosign a Loan

Cosigning a loan can be a stressful business. Often it's a relative who is asking for help in getting a car, a student loan or a piece of property. It's hard to say no. We all want to help out those we love. However, when helping out others make sure you know the risks you are taking. When cosigning a loan be aware of the responsibilities you will have and what you need to do to navigate the entire process without hurting yourself financially.

What You Should Know About Contracts

• What it means to be a cosignor.
• Know the basics about how contracts work.
• Understand what it means to be in breach of contract.
• Understand the process of modifying a contract.
• Get the facts about tax treatment of interest paid on loans.

What You Need to Know If Something Goes Wrong

• Know the steps needed to close an account.
• Understand your rights under the Fair Debt Collection Act.
• Get the facts about bank account seizures and garnishment.
• If you are a Servicemember, get the facts about the Servicemembers' Civil Relief Act.
• Know what it means to be judgment proof.
• Get the facts about reclaiming the property.
• Understand the basics of fair credit reporting.
• Know how to remove some types of information from your credit report.