Co-signed problem

TitaniumCash · ‎12-30-2017

My father co-signed a vehicle purchase for my brother. They both have low credit scores, and I believe my father is in some type of repayment program due to inability to pay all his debt on time. The car was $30,000 at time of purchase with ~20% interest rate. Brother did $5,000 down payment and paid for a few months but has since run off and now my father is responsible for the payments. It’s about $800-$900 per month on top of his mortgage and payment for 2 other cars. I’m now helping him pay the car loan for one of those 2 cars because he’s swamped in debt. We have no idea if my brother will come back, so we want to get rid of this car but can’t sell it. Is the only other option to do a voluntary surrender as advised by our lawyer? Has anyone been in similar situation or know someone who was and can share some opinion? I’m just afraid he’s going to be late with mortgage because of this car. He told me now the balance is actually more than the original amount, so they’ve just been paying interest and late fees!

Anonymous · ‎12-30-2017

I would definately pay my mortgage before a vehicle payment, a house is more important than the vehicle in question. With that being said, a voluntary reposession will still wreck his credit, voluntary or not a reposession is a reposession. Is it possible that he finds out what the vehicle is worth to a dealer and come up with the difference between the payoff and the offer?

DeeBee78 · ‎01-02-2018

@TitaniumCash wrote:
My father co-signed a vehicle purchase for my brother. They both have low credit scores, and I believe my father is in some type of repayment program due to inability to pay all his debt on time. The car was $30,000 at time of purchase with ~20% interest rate. Brother did $5,000 down payment and paid for a few months but has since run off and now my father is responsible for the payments. It’s about $800-$900 per month on top of his mortgage and payment for 2 other cars. I’m now helping him pay the car loan for one of those 2 cars because he’s swamped in debt. We have no idea if my brother will come back, so we want to get rid of this car but can’t sell it. Is the only other option to do a voluntary surrender as advised by our lawyer? Has anyone been in similar situation or know someone who was and can share some opinion? I’m just afraid he’s going to be late with mortgage because of this car. He told me now the balance is actually more than the original amount, so they’ve just been paying interest and late fees!

Sounds like your dad might have larger debt management issues outside of this car loan. For what it’s worth, a volutanry surrender isn’t anything more than a repossession with a nicer sounding name. It will still be on his credit reports for 7 to 10 years, but If he’s already late on the payments, he’s pretty much ruined his credit for a while anyway.

If you guys aren’t able to make up the difference between the vehicle’s value and what’s owed (whether via cash, loan, or other method) it may be time to call the finance company and tell them to come get it. That should be your last option though.

Anonymous · ‎01-03-2018

@DeeBee78 wrote:
@TitaniumCash wrote:
My father co-signed a vehicle purchase for my brother. They both have low credit scores, and I believe my father is in some type of repayment program due to inability to pay all his debt on time. The car was $30,000 at time of purchase with ~20% interest rate. Brother did $5,000 down payment and paid for a few months but has since run off and now my father is responsible for the payments. It’s about $800-$900 per month on top of his mortgage and payment for 2 other cars. I’m now helping him pay the car loan for one of those 2 cars because he’s swamped in debt. We have no idea if my brother will come back, so we want to get rid of this car but can’t sell it. Is the only other option to do a voluntary surrender as advised by our lawyer? Has anyone been in similar situation or know someone who was and can share some opinion? I’m just afraid he’s going to be late with mortgage because of this car. He told me now the balance is actually more than the original amount, so they’ve just been paying interest and late fees!
Sounds like your dad might have larger debt management issues outside of this car loan. For what it’s worth, a volutanry surrender isn’t anything more than a repossession with a nicer sounding name. It will still be on his credit reports for 7 to 10 years, but If he’s already late on the payments, he’s pretty much ruined his credit for a while anyway.

If you guys aren’t able to make up the difference between the vehicle’s value and what’s owed (whether via cash, loan, or other method) it may be time to call the finance company and tell them to come get it. That should be your last option though.

This.

I'm not one to recommend BK lightly, but I would have your Dad consult with a BK attorney.

DeeBee78 · ‎01-03-2018

@Anonymous wrote:
@DeeBee78 wrote:
@TitaniumCash wrote:
My father co-signed a vehicle purchase for my brother. They both have low credit scores, and I believe my father is in some type of repayment program due to inability to pay all his debt on time. The car was $30,000 at time of purchase with ~20% interest rate. Brother did $5,000 down payment and paid for a few months but has since run off and now my father is responsible for the payments. It’s about $800-$900 per month on top of his mortgage and payment for 2 other cars. I’m now helping him pay the car loan for one of those 2 cars because he’s swamped in debt. We have no idea if my brother will come back, so we want to get rid of this car but can’t sell it. Is the only other option to do a voluntary surrender as advised by our lawyer? Has anyone been in similar situation or know someone who was and can share some opinion? I’m just afraid he’s going to be late with mortgage because of this car. He told me now the balance is actually more than the original amount, so they’ve just been paying interest and late fees!
Sounds like your dad might have larger debt management issues outside of this car loan. For what it’s worth, a volutanry surrender isn’t anything more than a repossession with a nicer sounding name. It will still be on his credit reports for 7 to 10 years, but If he’s already late on the payments, he’s pretty much ruined his credit for a while anyway.

If you guys aren’t able to make up the difference between the vehicle’s value and what’s owed (whether via cash, loan, or other method) it may be time to call the finance company and tell them to come get it. That should be your last option though.

This.

I'm not one to recommend BK lightly, but I would have your Dad consult with a BK attorney.

I was avoiding the BK word, because I do because I have mixed feelings about it. Some people I know personally who have filed three times in the past to eliminate their debt (this was before the BK reform), and it grinds my gears that they got so many fresh starts. In some cases, like your dad, it might not be a bad idea to consider it.

916networktech · ‎01-07-2018

Ok a friend I know had something similar, he lost his job couldn't pay the $550 monthly fee, had an order of repossessions, however he moved left no forwarding address, he was still able to renew the tags, drive, and insure the car, after 4 years he said heck with this got tired of looking over his schoulder, he Called the bank , the had charged off the car, and told them the car was parked in a church, a week later they picked it up, sold it at auction sent him a remaining bill, look up your states statue of limitations, he didn't get sued, and it's off his credit reporT