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  1. #1
    Join Date
    Oct 2011
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    1

    Default Options for a Cosigner to Recover Money Paid

    My question involves collection proceedings in the State of Wisconsin.

    I was a cosigner on a private student loan through a nationwide bank approximately three years ago. The borrower has since left the state, changed phone numbers, email addresses, etc. I have no ability to contact this person.
    I recently received calls from a collection agency stating that the loan was in default. I have perfect credit outside of this (mistake?!) and the ability to pay off the balance ($2,500), so I did so to prevent further harm to my credit.
    My question is, what are my legal options in recovering the balance I paid off? The person on the phone from the agency said I had the option of filing in small claims court. Is it worth the risk? What recommendations do you have for me?

    Thank you.

  2. #2
    Join Date
    Sep 2010
    Posts
    19,901

    Default Re: Options for a Cosigner to Recover Money Paid

    What contract do you have with the other borrower that implies they're under any obligation to pay you anything?

  3. #3
    Join Date
    Sep 2005
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    Behind a Desk
    Posts
    98,846

    Default Re: Options for a Cosigner to Recover Money Paid

    flyingron, the legal theory would likely be "unjust enrichment".

    What's the "risk" of suing in small claims court?

    Suing a person in another state is cumbersome and can be expensive (travel costs, etc.); suing in your state will leave you with a judgment you would have to domesticate in the other state in order to enforce it through that state's courts.

    You know better than us whether this person has any money with which you might be paid, should you win a judgment.

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