Welcome! My goal is to do my very best to understand your situation and to provide a full and complete answer for you.
Good afternoon. This is a difficult situation your daughter is in as I'm sure you suspect. There are two contractual relationships here. First, there is the contract
with your daughter and her friend with the bank, and then there is the one between your daughter and her friend. With regard to the contractual relationship with the bank, your daughter is full liable for the unpaid balance of the note if it isn't paid. If not paid, the bank can repossess the car, sell it, and both your daughter and her friend are jointly and severally liable...meaning the bank can pursue either or both of them for the full amount owed until the bank gets paid in full. But, with regard to the contractual relationship between your daughter and her friend, if your daughter has to pay any part of the loan, she can sue her friend to recover. Once the suit is filed and a judgment awarded, your daughter would become a judgment creditor, and if her friend doesn’t then pay the judgment, she can have the sheriff serve a summons on her friend for a debtor examination. That forces her friend to meet her in court and answer questions under oath about her friend's assets. After that information is obtained, your daughter has the power to attach bank accounts, have the sheriff seize other personal property, and/or place liens on any non-homestead property to satisfy the judgment. North Carolina, unfortunately for your daughter, does not allow wage garnishment. If her friend does fail to pay the loan and your daughter doesn't pay as co-signer, it will impact your daughter's credit negatively.
This is the part of my job I don't like...when the law is not in favor of my customer. I wish I could tell you that your daughter could easily get out of this situation, but, I can only provide you information based on the law so that you can act on the best available information to you. ………..I wish I had better news, but can only hope you recognize and understand my predicament and don't shoot the messenger. I'm sorry!
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