QUESTION: What to do if you are a co-borrower and the borrower has stopped paying?
The status of a co-borrower on a loan implies joint and several liability to the bank, so if the main borrower stops making payments, the financial burden and all legal risks automatically fall on you. In such a critical situation, you need to act immediately and coldly. The first step will be an emergency contact with both the borrower and representatives of the credit organization. It is necessary to find out the reasons for the cessation of payments, assess the scale of the problem, and understand whether this situation is a temporary difficulty or malicious evasion of obligations.
The second important priority is protecting your own credit history. It does not matter to the bank which of the co-borrowers contributes the money, the main thing is that the payment arrives on time. If the main borrower is temporarily insolvent, you are strongly advised to make the monthly payments yourself. Allowing a delinquency will ruin the credit history not only of the main debtor, but also of you, which in the future will close access to any other loans, mortgages, or installment plans, and will also lead to the accrual of fines and penalties.
The third stage will be the legal settlement of the issue and the protection of your interests. You can use the following recommendations to minimize losses:
Timely intervention and competent legal steps will help minimize damage to your budget and reputation.