Rita cosigned a promissory note for $500 at the Federal Credit Union for her friend Sue.If Sue defaults on the note,Rita can not only collect $500 from her but also get the Federal Credit Union's rights against Sue.

Question

Quizplus · Accepted Answer

This statement accurately describes the concept of cosigning a loan or promissory note. As a cosigner, Rita is not only guaranteeing that the loan will be repaid, but she is also agreeing to be responsible for the debt if the borrower (Sue) defaults. In this case, if Sue does default, Rita would be able to collect the $500 from her, but she would also have the right to pursue legal action or collection efforts against Sue through the Federal Credit Union, which holds the loan contract.

Rita Cosigned a Promissory Note for $500 at the Federal