Consumer Protection Law
Consumer Protection Law Questions? Ask a Lawyer Now.
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.