Liability of a co-signer
My husband co-signed on a rental lease agreement for his daughter in Phoenix, Az. She has broken the lease and Collections U.S.A., Inc. wants us to pay the full amount which is $5,600. They are willing to take $4000 from us and will go after the daughter for the rest. Why should we have to pay the larger amount?
Re: Liability of a co-signer
The short answer to the question you posed is, because a co-signer is generally liable to the holder of the debt for 100% of the debt, notwithstanding that you have, at a minimum, a right of contribution for the prorata amount from the other co-signers.
You should contact a lawyer who practices in debtor/creditor relations, and is familiar with this area of the law as it relates to consumer transactions.
You may have one or more legal defenses to a suit to collect. In addition, you may have one or more claims against the collection agency that contacted you for violations of federal law – Fair Debt Collection Practices Act – and its Colorado counterpart. For starters, a collection agency must be licensed by the Colorado Collection Agency Board prior to making an attempt to collect a debt from a Colorado resident. This licensing information is available on the internet on the Colorado Attorney General’s web page.
Roger Johnson
Roger D. Johnson, P.C.
3705 Kipling St., Suite 208
Wheat Ridge, CO 80033-5792