What is a co -founder?

co -founder is a party that shares liability for debt and may be responsible if the other party does not pay or supports bankruptcy. The co-founder must agree to the shared liability and cannot be added to the debt without consent or previous agreement. The identity of all debtors may be important in the event of collection and people should think carefully before they agree to take over the responsibility for the debt, even if they think it is unlikely that the original debtor will give up duties. Parents often serve as co -founders of student loans, for example because university students do not have an established credit history and are an unknown risk. The creditor wants to increase the chance to get the money back, so the co -founder requires a loan. Likewise, people who are poor credit risks can look for a partner for debt to access better interest rates and conditions.

Under the Terms Debt Agreement, the primary debtor is responsible for repayment but if the payment payments stop or ProblIt will occur, the creditor can find the co -founder. In the event of failure, the co -founder is responsible for the debt balance. This may be extremely risky with a mortgage or other large loan, because the co -founder may not have access to the resources to pay it.

In some types of bankruptcy proceedings, creditors may immediately contact the co -founder and require them to lend. With others, if the debtor creates and maintains the repayment plan, they will not answer. For example, in the United States, bankruptcy provides a co -worker's stay in Chapter 13, who prevents creditors from lending to other parties for a loan. Only if the bank of bankruptcy fails to comply with the payment agreement can they take steps to obtain a debt.

, when asked to become a legal co-debtor, it is important to think carefully. Legal liability for a loan can become a serious problem. If the borrower default may co -foundDatel to risk on the hook for repayment. Inability can result in a black mark in a credit record. It is reasonable to ask the debtor for proof of income and support, to prove that the risk of the default setting is low and the loan is likely to be paid off.