topic Re: Cosigner on a defaulted auto loan in General Credit Topics

Cosigner on a defaulted auto loan

Anonymous — Tue, 30 Mar 2021 19:33:02 GMT

Not sure this is the correct place for this question, and I'm also pretty sure I know the answer but I've never been in this position myself so I figured I'd ask. My 23 y/o daughter cosigned for a car for a "friend". Said friend never made a single payment on the car and ultimately it was repossessed. This is ofcourse showing up as the only derogatory on her report. Is there anyway short of my kid attempting a pfd to remove this? I told her to never cosign on stuff for people, but ya know...in one ear and out the other. Painful lesson for her, but trying to help where I can. Thanks everyone.

Re: Cosigner on a defaulted auto loan

Slabenstein — Tue, 30 Mar 2021 19:49:00 GMT

A cosigner has full responsibility for the debt, so she wouldn't have any more options than if she had defaulted on her own auto loan. Does she have a CA showing on her reports in addition to the repo, or is it still with the original creditor?

Re: Cosigner on a defaulted auto loan

Anonymous — Tue, 30 Mar 2021 19:49:34 GMT

Yeah thats what I figured. Its still with the original lender as of now.

Re: Cosigner on a defaulted auto loan

Slabenstein — Tue, 30 Mar 2021 20:02:58 GMT

She will probably not be able to get a PFD from an OC, but you can always ask. Credit-wise, she should still address it before it goes to a CA, becomes a judgement/garnishment, etc. At the very least she may be able to settle for less, and it's possible that sale of the repo'd vehicle knocked off some of the outstanding balance already. (But that's very vehicle- and situation-dependant. Sometimes the lender can get a decent chunk back, often nothing or next to nothing.) She'll probably have this derog on her reports for 7 years, but imo will still want to work it out w/ the OC if she has the money to do so to avoid further negative consequences.

Re: Cosigner on a defaulted auto loan

Anonymous — Tue, 30 Mar 2021 20:09:14 GMT

Yeah, that's exactly what I told her AFTER I reminded her to never cosign for anything for anyone unless it's a spouse. And even then I'd personally make sure I knew real well that they would pay. I'm going to have her contact them here in the next day or 2 to arrange some payments to avoid it going to a CA. I've had repossessions before, but I've always pif after the vehicle was auctioned off. Yeah it stays for 7 years, but its a lot better than the alternative. Appreciate the confirmation of what I already thought!

Re: Cosigner on a defaulted auto loan

pizza1 — Wed, 31 Mar 2021 01:55:02 GMT

Id be suing the friend in civil court for the non- payments , plus attorney fees, etc... hard lesson to learn unfortunately.

Re: Cosigner on a defaulted auto loan

OmarGB9 — Wed, 31 Mar 2021 18:05:19 GMT

@pizza1 wrote:
Id be suing the friend in civil court for the non- payments , plus attorney fees, etc... hard lesson to learn unfortunately.

I agree with this, in addition to what you're planning to do with the TL itself to work it out with the lender @Anonymous.

Re: Cosigner on a defaulted auto loan

Anonymous — Wed, 31 Mar 2021 18:15:01 GMT

That was actually my very first thought. Hire a lawyer and take her to court! Evidently here's how it went down: daughter was asked to cosign and did, friend got the car and about a week later stopped responding to any correspondence from my kid. She learned through mutual acquaintances that she left the state a little after the car was taken. I know that she could easily be found and all, but im not going to recommend that route. Love my kid to death, but I told her never to do this and she did it anyway. And from what I can gather, it wasn't even really that close of a friendship. I think the lesson will be drilled in a lot better by her having to do exactly what a cosigner does, be responsible for the debt. Itll cost her money and a negative file for a few more years but I'm hoping it will be the last time she let's her heart make financial decisions.

Re: Cosigner on a defaulted auto loan

Bankrupt2019 — Wed, 31 Mar 2021 18:28:20 GMT

Unfortunately it appears your daughter has learned the hard way that parents (usually) know best. 😢

Re: Cosigner on a defaulted auto loan

OmarGB9 — Wed, 31 Mar 2021 18:30:10 GMT

@Anonymous wrote:
That was actually my very first thought. Hire a lawyer and take her to court! Evidently here's how it went down: daughter was asked to cosign and did, friend got the car and about a week later stopped responding to any correspondence from my kid. She learned through mutual acquaintances that she left the state a little after the car was taken. I know that she could easily be found and all, but im not going to recommend that route. Love my kid to death, but I told her never to do this and she did it anyway. And from what I can gather, it wasn't even really that close of a friendship. I think the lesson will be drilled in a lot better by her having to do exactly what a cosigner does, be responsible for the debt. Itll cost her money and a negative file for a few more years but I'm hoping it will be the last time she let's her heart make financial decisions.

Said "friend" is also getting their credit wrecked, but clearly they don't care. Not sure what their end goal was, if the car will (already did?) just end up getting repo'ed...

Re: Cosigner on a defaulted auto loan

Anonymous — Wed, 31 Mar 2021 18:45:25 GMT

Yeah I have no idea man. Probably just a kid who thought as long as they got the car everything would be cool. Fortunately for MY kid, this is the only negative TL in her file. Not even a single missed payment and her scores are all well above 700. As long as she can make payment arrangements before they sell to a CA, she'll live.

Re: Cosigner on a defaulted auto loan

Iusedtolurk — Wed, 31 Mar 2021 19:09:23 GMT

@Anonymous wrote:
Yeah I have no idea man. Probably just a kid who thought as long as they got the car everything would be cool. Fortunately for MY kid, this is the only negative TL in her file. Not even a single missed payment and her scores are all well above 700. As long as she can make payment arrangements before they sell to a CA, she'll live.

Life's lessons are tough sometimes but as long as you learn from them they could keep you from even worse situations down the line.

Hope she fares well after this lesson.