If You Cosign a Loan

question 141

Multiple Choice

If you cosign a loan:

• A) you are only responsible for half of the debt obligation.
• B) you will be asked, but not required, to pay the loan if full if the borrower fails to pay.
• C) you will be required to pay the loan in full if the borrower defaults on the payments.
• D) the creditor must first try to collect from the borrower.
• E) the creditor is prohibited from garnishing your wages if you refuse to pay the loan in full.

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Definitions:

Postdated Check

A check written with a future date, which cannot be cashed or deposited until that date.

Insufficient Funds

A situation where an account does not have enough money to cover transactions, resulting in a bounced check or declined payment.

Rental Contract

A legal agreement between a landlord and a tenant outlining terms, conditions, and duration of tenancy for a rental property.

Bad Check

A check that cannot be processed because the account on which it is drawn lacks sufficient funds.