A co-signer, also called a surety or co-debtor, on a credit agreement is jointly and severally liable for the full outstanding amount on that account. This liability exists independently of whether the primary account holder is under debt review.
During debt review:
When the primary account holder is under debt review, the restructured payment plan applies to that specific credit agreement. As a co-signer, you are technically still liable for the full amount, but while the debt review plan is in force and payments are being made, credit providers typically do not pursue co-signers for the balance.
When debt review is removed through a court application:
Once the primary account holder's debt review is terminated and debt review protection ends, the credit provider can demand the full outstanding amount from either the primary account holder or the co-signer. If the primary account holder cannot pay, the credit provider will pursue the co-signer for the full outstanding balance.
This is particularly relevant if:
• The primary account holder has other outstanding accounts to prioritise and cannot immediately pay the account you co-signed.
• The account was in arrears during the debt review period.
When debt review is removed through a clearance certificate:
If the primary account holder has settled all accounts including the one you co-signed, your co-signer liability is discharged. No further amounts are owed by either party.
If you are a co-signer on an account where the primary holder is removing debt review, seek independent legal advice to understand your exposure before the court order is granted. Knowing what creditors may demand of you allows for proactive negotiation.