I had a friend whom I just graduated from college with ask me to co-sign on a loan for some furniture. He had just accepted a good position, which he still has. I thought that since we knew each other well (thought!) and he had a good job he wouldn't have a problem paying back the loan. He didn't have a credit card, and had no credit so I figured it would be OK if I co-signed and helped him build some credit. He told me that he would definitely pay it back.

I found out a month ago that he never paid on the loan, and it has been at a collection agency for over 6 months (the collections agency called me). I phoned him and he said that he paid that off. I told him to take care of the mistake and he said he would. It turns out he lied to me, and I got a call from the collections agency today saying that they were going to take us to court for the money if they didn't have a payment by Monday. They offered me a settlement that was actually a bit less than the original loan (with interest and penalties the amount of the loan had doubled). I decided to just pay it.

Is there anyway I can take him to small claims court and have a chance of getting back the money I paid? This was in Michigan and the amount I paid was $3500.

Thanks in advance for any information you may have on the matter.

You certainly have a legal claim against your friend. Whether it can be heard in the small claims court in your jurisdiction depends on what the monetary limit of the court is.

If your friend does not settle with you and you end up having to obtain a judgment against him you should be able to file a garnishment against his wages/salary.

We suggest you contact your local small claims court for more information on monetary limits and procedure.

Yes you have a good case against him, he has a job so you can get a garnishment wthout much problem.

I would file, there may be an issue as to which court will hear it, but file where it is best for you and see what happens.