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RobertJDFL
RobertJDFL, Lawyer
Category: Consumer Protection Law
Satisfied Customers: 12132
Experience:  Experienced in multiple areas of the law.
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I have been court summoned on a defaulted car loan
, So

Customer Question

Customer: **** ********, I have been court summoned on a defaulted car loan
JA: Thanks. Can you give me any more details about your issue?
Customer: So i have summoned on a car that i had repossessed when i had lost my job, this was about 5 years ago. During that time the loan was sold out to another company that was difficult for me to contact and setup payment arrangements. Now they have sent me and my cosigner a summons to court to pay them Im not sure about our options. I would file bankruptcy but my co signer has a active car note that she is paying on and is worried that it will affect that
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Submitted: 10 months ago.
Category: Consumer Protection Law
Expert:  RobertJDFL replied 10 months ago.

Thank you for using Just Answer. I look forward to assisting you.

You have a limited number of options in this scenario. You can contact the creditor who is suing you and try to set up a payment arrangement. Assuming you can reach an agreement, they can draft a settlement agreement that gets filed with the court and dismiss the case. I caution you that if you do this, however, that you make sure you are capable of making whatever payments you agree to, since typically such agreements stipulate that a default results in a judgment against you for the remaining balance without the need to return to court. This is likely your best option though.

Option two, you can answer the lawsuit, although it doesn't sound like you have any valid defenses (e.g., this isn't a mistake), and you haven't paid the loan, so the creditor is entitled to the money and will end up ultimately getting a judgment anyway. The same is true if you fail to file any answer at all - the creditor will get a default judgment. The problem with letting the creditor just get a judgment is that they can immediately proceed to try to collect upon it -through things like wage garnishment or seizure of assets, like your bank account.

The third option, bankruptcy, while it would wipe out your obligation, the co-signer is still on the hook - and now would be responsible for the whole thing. If they file for bankruptcy, it would remove the debt, and as far as their existing loan, they would have the option to "reaffirm" that debt, or tell the court they wish to continue paying on it, to keep their vehicle. Bankruptcy has significant ramifications, of course, and your co-signer may not want to file because of this debt.

If you need clarification or additional information, please REPLY and I'll be happy to assist you further. Thank you.

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