Two years ago, I helped my sister and brother-in-law buy a car while they were in Louisiana. Afterwhich, Hurricane Katrina hit and they relocated to Indiana. Thing is they are now separated and due to financial reasons are not meeting the car note. I co-signed and so the bank is now contacting me. I have asked that they return the car or sell it.. But I have not received a response. What can I do to get this settled. I do not want my great credit to be harmed. I paid 2 notes recently but I cannot afford to continue this. Can someone please advise. Yes, I have learned my lesson never co-sign for anyone, especially family! I know things, people and circumstances do chacge... but in order to get this off of me.. I need to make the best move and soon. But I need some real advise.
Serious inquires with proven successs please reply!
What should I do???
2007-10-06 17:32:51 · 4 answers · asked by KeraniBai 3 in Business & Finance ➔ Credit
Well if you don't want your great credit to get ruined you are going to have to continue with the payments or pay off the car. If it gets repossessed, whether they turn it back in or the bank comes and gets it, it will show up on your credit report. Also, they will auction it for a lot less than the loan balance, you will still owe the difference.
Now if you can't continue to pay the entire thing. There are a few things you can do. First talk to your sister and see if she can at least pay some of it. She pays you and you then make up the difference to pay the bank. She would then pay you back in the future.
Option 2 would be to sell the car yourself. You will still have to come up with the difference to cover the loan, but it will be a lot less to come up with than if they auctioned it from the repo.
Option 3 would be to see if she can get it re-financed in her name only. Depending on how long this car loan has been going on, they may be able to do that. Then what ever happens with the car it would be in her name only.
2007-10-06 18:02:46 · answer #1 · answered by OC1999 7 · 4⤊ 0⤋
Contact the bank and ask if you can simply pay off half of the debt still owed. If they will let you pay half of the loan, make sure you have paperwork to show for it. That way, when this debt lands on a lawyers desk to file suit, they won't be able to sue you for it as well. I work in debt collection, and I have seen many cases where one co-signer pays off half of the loan and leaves the other person responsible for the other half.
2007-10-07 10:11:06 · answer #2 · answered by Cosmic I 6 · 0⤊ 0⤋
I'm afraid you're on the hook for the car payments until the car is sold or repossessed. If it's repossessed, it's on your credit report, too. You can't "un-co-sign". If you have possession of the car, you can try advertising for someone to take over remaining payments. You can try negotiating with the bank to refinance and lower the payments (not likely).
2007-10-06 17:42:36 · answer #3 · answered by Resident Heretic 7 · 0⤊ 0⤋
Sorry - you signed, you're stuck for it. That's what cosigning means - you will pay if the original borrower doesn't.
I'd guess that pretty much everyone who cosigns and then the main borrower defaults, regrets cosigning. The moral of the story is never cosign for someone unless you are willing to just buy them whatever you are cosigning for.
2007-10-06 18:52:02 · answer #4 · answered by Judy 7 · 0⤊ 0⤋