new collection potential

[compassion101]

I have no late payments and only 1 collection, which will be falling off soon.

I cosigned a lease for two friend/employee that needed help and they ran off a few months ago, leaving $3k+ on their unused lease bill. Either I pay it or it will go to collection. I can't pay it but may be able to do a payment plan. I'm going to offer them to pay 1/3 since I was 1/3 names on the lease and advise them to go after the other two guys for the rest, but if that doesn't fly I'm having a hard time swallowing $3k I did as a favor and never lived in the apartment. Obv this is not really the properties issue but hopefully they will be lenient.

Any suggestions?

Would you pay the full amount on a payment plan rather than go into collection?

[pizzadude]

Is there any way that you can track them down and get them to pay you ??   Unfortunately as a co~signer each of you is liable for the full amount of the contract.

What do you think the likelihood is that the rental agency will sue you if you don't pay or can't pay the full amount ?

[compassion101]

I don't think they will go to claims court over it but I'd say likely if I do not pay it the CA will report it to the CBs within the next 2 months. I'm in process of improving credit and should have my scores 700+ by September and 760+ within 2 years but fear this would hurt it pretty bad.

Pretty much no shot at getting either of the other guys to pay unless I take them to court, and even then it will only be a judgement. Both of their credit is very bad which is why they needed help getting the place. They were doing some work for me at the time and I helped them out. Lesson learned for me.

The one guy moved out of state and left the other guy there, who told me he would handle the rent. Silly me for trusting him. I got a call mid-month saying the rent hadn't been paid. I went over there immediately and the place was empty and the guy (no longer working for me) was gone. I was able to sign a move-out paper to avoid eviction procedure thankfully, and according to the contract they tried to rerent the apt but could not find a tenant until after the lease was up, leaving $3k+ as the final bill 2 months ago.

I've sent letter to them asking if the other guys had paid the $3k (which I knew they wouldn't) and they have informed me the bill is outstanding and will go to collections.

[pizzadude]

Ouch.  Sorry that you have to deal with this now.    Unfortunately many times this is what happens with co~signed contracts....

I'd do whatever I could to prevent it from showing on your reports.....Maybe they'll work with you on a payment plan....or a lump sum settlement.

[Booner72]

The worst part of this, (and there are many, many bad parts to this story) is that this will show as an eviction or closely related to that on your CR.  If you don't own your own home, you can kiss your chances of getting rented to again goodbye.

I work with people helping them transition, and we often have trouble getting a place to live if their CR's show anything related to rental issues. (And often it was cases such as yours, not even an eviction).  It is the worst thing on your reports if you need to rent or lease.

Good Luck with this, and be very careful about the 1/3rd thing, since you're on the lease, you are responsible for the whole thing, regardless of what the other parties involved did or didn't do.

If you can borrow the money, beg, whatever  (don't steal, tho).......get a loan with your new good credit maybe?  Then sue the others?

Good Luck!!!!

[marty56]

PIF in full or payment plan to keep it off your CR is a no-brainer.

[compassion101]

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@marty56 wrote:

PIF in full or payment plan to keep it off your CR is a no-brainer.

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This is what I was thinking, just looking for reassurance that it is the best thing to do for my own interests. It's pretty hard to swallow 3k+ when all I was attempting to do was do something nice for two other people.

[compassion101]

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@Booner72 wrote:

The worst part of this, (and there are many, many bad parts to this story) is that this will show as an eviction or closely related to that on your CR.  If you don't own your own home, you can kiss your chances of getting rented to again goodbye.

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I thought an eviction was something very specific, and that I avoided that by turning in they keys (I had an extra set and the guy who ran out left his set on the counter) and signing the move out docs. Prteey certain the paperwork I have clearly shows this was a move-out that the property was okay with and that we would be billed the final amount, which came to 3k+.

If not paid (which I am not proposing to do), I would think it would report as a collection but nothing to do with an eviction. I do understand that there may be some seperate rental credit report that may say something about it but not eviction. Am I misunderstanding any part of this? Thanks for the help.

[Booner72]

An eviction is separate, but the collection will report as an apartment collection and that gets just as bad of a reaction from the potential landlords/rental agencies out there when I have helped clients in this situation. They don't like to see anything related to messing up a previous housing situation.

Good Luck!!!!!!!!!

ETA,  they get the exact same credit report as anyone would when they pull credit,  (what you get).  The only other kind of credit "report" out there is the ones that lenders can get if you are borrowing over 150K, and that can go back 10 years or more from what I've read here.  But I've never heard of anyone having that kind of a report pulled. 

Yes, you did do something very nice and this sucks and karma will make them pay and I do hope you pursue the judgment because sooner or later they might come around, win the lottery, get an inheritance, a tax refund, and then you would get your money back.  "No good deed goes unpunished."

[drkaje]

In a perfect world, they'd only ask for a third and pursue the other two guys legally. In this world, you're findable with credit to protect, there's very little chance an offer for less will be accepted.

FWIW, at least you have 2 months to work something out (negotiate), and avoid a judgement.