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CalAttorney2
CalAttorney2, Attorney
Category: Legal
Satisfied Customers: 10238
Experience:  Civil litigation attorney for individuals and businesses.
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I am stuck in a predatory auto loan. Florida, I consigned

Customer Question

I am stuck in a predatory auto loan.
JA: Because laws vary from state to state, could you tell me what state is this in?
Customer: Florida
JA: Have you talked to a lawyer yet?
Customer: I consigned for my brother to get an auto loan and he has only made one payment on time and has not gotten caught up yet. They send notice that if X amount is not paid by y date they will repossess the car and are no longer allowing partial or late payments. But they refused to repossess the car and continue to take late and partial payments
JA: What advice did they give you?
Customer: I have not spoken to a lawyer yet.
JA: Anything else you think the lawyer should know?
Customer: I would like to either be off of the loan or I want to sue them for predatory loan as they have dropped my credit score 200 points
JA: Because laws vary from place to place, can you tell me what state this is in?
Customer: Florida
JA: OK. Got it. I'm sending you to a secure page on JustAnswer so you can place the $5 fully-refundable deposit now. While you're filling out that form, I'll tell the Lawyer about your situation and then connect you two.
Submitted: 4 months ago.
Category: Legal
Expert:  CalAttorney2 replied 4 months ago.

Dear Customer,

Thank you for using the forum. My name is ***** ***** I hope to assist you today.

I am sorry to learn about this situation, but unfortunately I do not see either of the two resolutions that you are looking for.

  • You signed to be a cosigner on the loan, the only way that you can be removed from the loan is if the lender agrees, currently your loan is in default, it is highly unlikely that the lender will agree to allow one borrower (potential source of loss recovery) walk away.
  • You have stated several times that the loan is "predatory" - but I do not see from your fact pattern where the lender has acted in a predatory manner. Your brother has failed to make payments on the loan, so it is in default, this affects both his credit as the primary borrower, and yours as the guarantor.

Options to actually resolve this situation:

  • Make payments yourself to bring the loan current
  • Help your brother find a new creditor that he can refinance with on his own credit (this may be very hard to do without an additional down payment, but if possible it will allow him to make the payments entirely on his own - without further hurting your credit).
  • Sell the vehicle and pay off the loan - again this is probably going to require additional funds (the sale proceeds are unlikely to cover the entire loan amount). If you take this course of action, you will need to work with the lender as the lender usually will be the one holding the actual title to the vehicle until the loan is paid.
Customer: replied 4 months ago.
None of your options are an option.
Customer: replied 4 months ago.
They have stated that if x amount is not paid by y date they will repossess the car and are no longer allowing late or partial payments or they will repossess the car. It has been 3 years and they won't do it. Even if I paid $3000 to bring it current he would only take that as an opportunity to not pay for 2 months.
Expert:  CalAttorney2 replied 4 months ago.

Unfortunately you have signed a loan document as a guarantor, and your brother (the primary borrower) has allowed the loan to go into default. This means that unless the loan is brought current, it will continue to impact your credit score negatively.

If the loan continues to go unpaid (gets so bad the creditor has to repossess or file a breach of contract suit), you can find yourself with a civil court case and judgment against you forcing you to pay the balance. (If your brother keeps on paying the money a little at a time, that can keep them at bay, but each individual creditor does this at their discretion).

(Repossession of the auto alone does not end your liability - if the car is repossessed, the car is sold at a repo auction and the amount it sells for, minus the cost of the repossession and sale, is then credited against the loan amount. The creditor can then sue you for the remainder (called a "deficiency suit").

You can try negotiating with them to get a settlement or bring it current, but if this creditor isn't willing to work with you, you may want to try a new lender (small, local, banks and credit unions are usually easier to deal with than large banks and auto dealer lenders).

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