What are the dangers of cosigning a loan?
Q: My father-in-law, who has cosigned on a mortgage for a friend, is leaving his estate to his two sons. When he passes away, will his estate be responsible for that mortgage if the primary borrower defaults on his payments?—Grace, New York Lynn Brenner replies: In a word, yes. If you cosign a loan, you are as liable as the primary borrower—the loan appears as an outstanding debt on your credit report, the lender can sue you to collect, and after your death your estate can become responsible for the debt. The situation you describe is a reminder of the perils of cosigning. The mortgage your father-in-law cosigned is a potential claim against the estate. If the primary borrower’s finances don’t inspire confidence, your father-in-law’s executor may want to keep enough assets in the estate to cover the mortgage until it’s paid off. That’s because it’s an executor’s duty to settle any debts before distributing assets to the heirs—the executor is personally liable if creditors later come to
