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Dimitry K., Esq.
Dimitry K., Esq., Attorney
Category: Legal
Satisfied Customers: 41220
Experience:  Multiple jurisdictions, specialize in business/contract disputes, estate creation and administration.
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I am a co-signer to a loan distributed by a bank in Texas in

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I am a co-signer to a loan distributed by a bank in Texas in 2008. The person stopped paying in 2009, and therefore along with my other co-signer we resigned the loan in 2010 so he can start paying by working out with the bank. Now, for a year he has not paid and we are being sued now, what are our options here?? Credit history got dinged every year because of this, anyway to counter sue the bank or anything?? As a CA resident, am I still liable for this loan as I thought after 4 years I am relieved of this loan, correct?
Thank you for your question. Please permit me to assist you with your concerns.

If I may ask, is the property located in California or in Texas? Is this a loan for a personal property or commercial? When was the last activity under this loan--activity can be anything from payment, assumption of debt, refinance, etc. Please advise!
Customer: replied 2 years ago.

This was a personal business loan originally for 25K and now after 5 years he still owes around $19,800. I believe he has not paid anything to the bank for over a year now. I thought they had charged it off as it shows as code "L" in my credit history for last nine months.

Thank you for your follow-up.


A personal business loan is governed under the laws described in the agreement itself. If California was listed, then it would have a 4 year statute that would run from the last activity date. That means if he has made a payment within the last year or two, it updated the statute of limitations and has renewed the lender's ability to pursue collections. As it stands you have three options at this point, none of them ideal. First, you can contact the lender and negotiate a payment plan. Second, you can contact the lender and pay off the debt, and then pursue the collections yourself against the other person via the courts. That is obviously not ideal and uncertain, but it is possible especially if he did file for bankruptcy but did not include this debt, or did not include you as creditors. Finally and most potentially difficult, you could choose to file for bankruptcy yourself and get this discharged against you. That will most definitely affect your credit further, but it would keep the lender from pursuing you. As I said, it is not ideal, but those are the options that you may have at this time.


Good luck.

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