When you signed as a guarantor, you agreed to step into the shoes of your nephew if he failed to adhere to his obligations under the lease agreement. The language of the guaranty agreement dictates your obligations and remedies. Thus, your saying -- "I was never supposed to pay" isn't really true because you did sign a guaranty agreement. You knew the risk that you'd have to pay rent in the event your nephew didn't. And presumably, you voluntarily agreed to accept that risk.
If you do not have an express agreement with your nephew it may be more difficult for you to sustain a cause of action against him for breach of his agreement and recover any monies from him -- especially in light of the fact that you committed yourself to the landlord via the guaranty agreement. You might be able to sustain a lawsuit on the grounds of contribution -- but even then, it may be difficult to collect monies from your nephew.
Consult a local attorney to review your paperwork to determine what, if any, remedies you may have.
DISCLAIMER: Brandy A. Peeples is licensed to practice law in the State of Maryland. This answer is being provided for informational purposes only and the laws of your jurisdiction may differ. This answer based on general legal principles and is not intended for the purpose of providing specific legal advice or opinions. Under no circumstances does this answer constitute the establishment of an attorney-client relationship. For legal advice relating to your specific situation, I strongly urge you to consult with an attorney in your area. NO COMMUNICATIONS WITH ME ARE TO BE CONSTRUED AS ARISING FROM AN ATTORNEY-CLIENT RELATIONSHIP AND NO ATTORNEY-CLIENT RELATIONSHIP WILL BE ESTABLISHED WITH ME UNLESS I HAVE EXPRESSLY AGREED TO UNDERTAKE YOUR REPRESENTATION, WHICH INCLUDES THE EXECUTION OF A WRITTEN AGREEMENT OF RETAINER.
A guarantor guarantees payment for someone else if they don't pay. So if your nephew doesn't pay, your are responsible as guarantor. You will need to work out repayment with your nephew unless the two of you have your own agreement regarding reimbursement.
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It is not wise to be a co-signer for a relative (or anyone else) unless you are prepared to make good on your promise to pay when called upon to do so. The transaction would not have proceeded if you refused to be the co-signer, so you have no one to blame but yourself. Of course you can sue him if you are prepared to become the family "villain". Satisfying any judgment depends on the laws in your state, so a lien on a student loan disbursement depends on whether or not such income can be exempted.
No, you can not put a lien on his student loan disbursement.
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