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@sammyfire2001 wrote:
My friend has an issue with a car loan that fell into default. I'm pretty sure that most you will tell me to to advise him to seek legal advise, which he already has. He cosigned on his sister's car loan and she fell behind on thepayments which lead to her defaulting on the loan. This was several years ago.
Since then the sister has filed for bankruptcy, so the bank cannot collect the past due amount from her. As a result, they now going after my friend to pay the past due balance on the loan. Is there any way he can shift the responsibility back to his sister? They're going to start garnishing his wages shortly.
Thanks in advance.
He has no choice but pay the bank himself, and the sooner he pays the bank the better. He can then go after his sister, but there exists no mechanism by which he can force the bank to go after his sister. When he cosigned he accepted full responsibility for the debt, that's what cosigning means.
In most cases, cosigning is a very bad idea. Usually the lender won't ask for a cosigner unless they have reason for concern about whether the borrower will pay, so the cosigner is taking on a risk that no lender will accept. Implicitly, the cosigner is saying, "I know this person's risk of default better than professional loan officers do."