A question remains as to the relationship between you and your sister, and whether she has any recourse against you for making voluntary payments without your consent or knowledge. Do you have a written agreement to pay her back for money expended? Did you think she was co-signing the loan out of the goodness of her heart to help her sister?
Is she a guarantor against your default or simply a co-signer?
There are a lot of questions that need to be answered before she can prevail against you. Legally this is not a simple matter. You should have a lawyer, especially if your sister has one.
Without seeing the contractual agreement, this is a factually complicated case. Are you sure that you have been sued? Have you checked the register of actions? Have you been served? If you have been served, the clock has started ticking to respond to the complaint with an answer. Feel free to contact our offices immediately for a free consultation on your rights - 858 900 7342. Good luck!
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Your sister cosigned, so you obviously had a good relationship at some point. Did you consider spending the $$ on a phone call?
The above is general legal and business analysis. It is not "legal advise" but analysis, and different lawyers may analyse this matter differently, especially if there are additional facts not reflected in the question. I am not your attorney until retained by a written retainer agreement signed by both of us. I am only licensed in California. See also avvo.com terms and conditions item 9, incorporated as if it was reprinted here. Please visit my web site: www.avanesianlaw.com for more information about my services.