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VanDLaw
VanDLaw, Attorney
Category: Bankruptcy Law
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Experience:  Chapter 7 & 13
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My fiance cosigned for his brothers car - however we just

Customer Question

My fiance cosigned for his brother's car - however we just found out when the papers went through for the loan my fiance is listed as the purchaser, not his brother. His brother has stopped paying the car loan (they are estranged). As a framing contractor my fiance is currently not getting any jobs and money is tight. He needs a solution because not only is the car not in his possession but his credit is being ruined for lack of payment. He has only just found out his brother stopped paying the loan. Is there a way he can legally surrender the car? The bank said the only way to rectify this issue is for his brother to refinance and that isn't going to happen in fact I believe his brother did this on purpose because he does not have the credit to get a car loan but needs a car. Whatever the reason behind it is there a solution? My fiance should have been more vigilent but because its family he did not think this could happen and now we are suffering. Thank you.
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  VanDLaw replied 5 years ago.

HelloCustomer

 

Unfortunately, even if he was not listed as the purchaser, if he co-signed the loan he is responsible for repayment of the loan. The other issue is if the car is repossessed your fiance may be faced with a deficiency judgment against him as well.

 

Your fiance can surrender the car voluntarily. He can call the lender and tell them to pick up the car, however, that is not going to help if they decide to pursue the difference they get at auction and the balance of the note (deficiency judgment).

 

One of the only options at this point is to call and negotiate a payment plan with the lender. I am sure you are probably thinking that is not going to solve the problem and why should he pay for a car he doesn't drive, but if he is on the note he is responsible.

 

If he is on the title, he could go get the car and try and sell it. If the payments continue to be missed the car will be repossessed eventually.

 

This is one of the major "cons" of co-signing a loan, the risk is large, if the borrower does not pay it will damage your credit and could put you at risk for a judgment.

VanDLaw, Attorney
Category: Bankruptcy Law
Satisfied Customers: 833
Experience: Chapter 7 & 13
VanDLaw and other Bankruptcy Law Specialists are ready to help you
Customer: replied 5 years ago.
thank you I was afraid you were going to say that. I guess the option is to trade the car in...sell it to a used car place and try to upgrade the current vehicle my fiance has. Its more debt but I don't know what else to do we are in the poor house as it is. Thank you.
Expert:  VanDLaw replied 5 years ago.
Yes, I am sorry to have been the bearer of bad news. Good luck!

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