Do I use a loan that I am a cosigner on as a liability, or does it only count for the borrower? I want to include it as a liability but don't know if I am not allowed to do this.

2/25/2008 4:48:29 PM

Why? If you are trying to defraud a systen you'll get no support here...

2/25/2008 5:01:17 PM

If you are just doing pooljobs then prolly not a lot.

2/25/2008 5:03:28 PM

for student loans. i don't want to defraud anything, thats why i am asking. if anyone knows for sure it will help me out.

2/25/2008 5:05:13 PM

if the liability is an ITEM of VALUE, you have to take the value into consideration.

2/25/2008 5:09:51 PM

Cosigning a loan bears all the financial and legal consequences of taking out the loan yourself. Therefore, I would assume that this would be considered a liability.
^liability is a loan, so it would be the remaining loan value

[Edited on February 25, 2008 at 5:11 PM. Reason : .]

2/25/2008 5:10:59 PM

Yeah, and it shows up on my credit report so I would think I can use it as a liability.

2/25/2008 5:13:16 PM

net worth also takes into account equity.

so if you have a loan for 50k and the car/house/boat/plane/whtaever is worth 60k, that puts you +10k on net worth.

am i wrong? not an expert on this

2/25/2008 5:25:25 PM

yep, thanks

[Edited on February 25, 2008 at 5:28 PM. Reason : .]

2/25/2008 5:28:32 PM

I filled out a financial statement for a bank recently. They had a separate section called "Contingent liabilities" for indicating loans where you are a cosigner but its a loan for someone/something else. So, in this case it was not listed under my liabilities.

2/25/2008 8:39:58 PM

^ yeah, but it still is techinically a liability because the first time they don't pay they can come for you for the entire balance. Most places consider a cosigned loan not only a liability but a bad one since the person needed a cosigner. Don't cosign ever ftw.

2/25/2008 9:09:46 PM

^ well in this case the loan was for one of my businesses but i was personally contingent on it. i didnt cosign for someone with bad credit.

2/25/2008 11:40:28 PM

cosigning a loan is most definitely a liability so include it when determining your net worth

2/26/2008 12:02:35 AM

It's a contingent liability (i.e. a potential liability not an actual liability), so you only incur the liability if the borrower defaults on the loan. You should disclose it but note that it is a contingent liability. You would typically only include it in a calculation of net value if its a probable liability (very good chance the borrower will default)

[Edited on February 26, 2008 at 5:29 PM. Reason : ]

2/26/2008 5:26:56 PM