I cosigned on a car loan and now the person in posession of the vehicle is giving it back because the transmission needs to be fixed and he can't afford that and the payments anymore. What will happen to the remaining balance of the loan? Since he can't pay for it will they go after my money? What if I don't pay?
Hello and thank you for the question. I am sorry to read of this dilemma. He should try to get a full release. If the transmission should be working and the malfunction was a defect/breach on sale, they should take it back and not pursue a balance on payment. If they determine he is in breach, they could sue him. If you co signed, they could name you as well. You could then demand the primary owner pay and cover you. If you dont pay and they sue, they could secure a judgment. That judgment could be used to reach bank accounts and lien real estate.
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