I'm sure many have experienced being asked by a friend or relative to co-sign a loan. And, even if we don't really like it, we usually oblige with the thought that we are just co-makers. The belief is that we are only going to have problems if the principal will refuse to pay. Not necessarily.
A friend of mine, Nelson Getigan, a lawyer and entrepreneur, warns us of the consequences. In an article entitled "The Unknowing Debtor: A Discussion on the Liability of Co-makers", he talks about Palmares vs. Court of Appeals, a decision of the Philippine Supreme Court which says that a creditor may go after the co-maker even without going after the principal first.
The article is posted at www.gccs.com.ph, the official website of GCCS and Associates, a company specializing in debt collection and credit investigation here in the Philippines. It is the first of a series of articles related to our laws on debt collection. The lesson is that we should know our rights and avoid paying for someone else's loan.