Does a power of attorney make you responsible for paying the debt

by ryan on September 14, 2017




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Does a power of attorney make you responsible for paying the debt?

 

A power of attorney is a legal authority that you confer to an individual, who gets the right to make financial transactions on your behalf. You are not liable to pay for the personal liability, if you have been assigned a power of attorney. Before you confer power of attorney to an individual make sure that you consult with a lawyer, who has deft knowledge related to powers of attorney.

What is a Power of Attorney?

The agent who has been assigned with a power of attorney also has the right to access your bank account, pay bills as well as manage your debts on your behalf. The individual also hold the authority to take decisions regarding your medical care. You can still manage your own affairs even after assigning a power of attorney to another agent. Remember, as long as you are not mentally challenged, till then the agent is liable to abide by your stated wishes.

What is the role of the cosigner?

The responsibility of a cosigner and an agent is different, as the former is presumed to hold some level of financial liability.

The cosigner is equally liable to incur the debt or responsible for repaying the debt, if the actual purchaser fails to pay back the owed amount. However, it will be determined on the basis of the agreement.

If the cosigner is equally responsible for incurring the debt, then the creditors can pursue the cosigner for collection.

But the creditors should approach the principal debtor who actually incurred the debt before attempting to collect debt from the cosigner.




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