Found someone to take over payments, but I would still be on the loan?

[Anonymous]

Hi all,

I've been trying to get out from under a bad car loan that I (stupidly) co- signed for when I was with my Ex.

I think I have found someone to take over payments on the vehicle. I called Chrysler Financial and informed them and they are faxing me a credit check auth form for the 3rd party to fill out. 

The thing that confuses me, is that even if they are accepted, they will only add the 3rd party to my existing loan. They will not remove my name, or my Ex girlfriend's name from the loan. They claim it is a legal contract and cannot be altered. That sounds like BS to me, as legal contracts are altered all the time, as long as both parties agree. 

The car is upside down on the loan, so it is not able to be re-financed at this time. Short of refinancing is there any way I can get my name off of the loan?

What can I do in this situation? 

 Thanks for your help!

[MattH]

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@Anonymous wrote:

Hi all,

I've been trying to get out from under a bad car loan that I (stupidly) co- signed for when I was with my Ex.

I think I have found someone to take over payments on the vehicle. I called Chrysler Financial and informed them and they are faxing me a credit check auth form for the 3rd party to fill out. 

The thing that confuses me, is that even if they are accepted, they will only add the 3rd party to my existing loan. They will not remove my name, or my Ex girlfriend's name from the loan. They claim it is a legal contract and cannot be altered. That sounds like BS to me, as legal contracts are altered all the time, as long as both parties agree. 

The car is upside down on the loan, so it is not able to be re-financed at this time. Short of refinancing is there any way I can get my name off of the loan?

What can I do in this situation? 

 Thanks for your help!

---

They are not likely to agree to modify the contract because there is no upside for them in doing so.  Your best way out is to pay more than the minimum each month to lower the principal balance to the point where the loan is no longer upside down and then can be refinanced.  Take a good hard look at your budget and find ways to redirect as much as possible to paying down that principal balance -- and learn from this to avoid ever again being upside down on a loan.

[Anonymous]

I've seen/heard quite a lot of auto loan/lease's original signers/co-signers cannot be removed unless its refinanced. You can try to have whoever is willing to take over payment to refinance the amount. That's how I did it after I broke up with my ex that I co-signed her for an auto loan. Now I'm trying to exit my lease early with Infiniti, but they told me my name will still be on it even someone is approved by Infiniti Financial Service to take over my lease. The *kind of* guarantee they are providing is that they only approve whoever has the same level of credit or higher to be able to assume my lease.

[MattH]

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@Anonymous wrote:
I've seen/heard quite a lot of auto loan/lease's original signers/co-signers cannot be removed unless its refinanced. You can try to have whoever is willing to take over payment to refinance the amount. That's how I did it after I broke up with my ex that I co-signed her for an auto loan. Now I'm trying to exit my lease early with Infiniti, but they told me my name will still be on it even someone is approved by Infiniti Financial Service to take over my lease. The *kind of* guarantee they are providing is that they only approve whoever has the same level of credit or higher to be able to assume my lease.

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This sort of situation is one of many disadvantages to leasing or buying without enough down.  A lease may seem advantageous because it sometimes allows a person to have a nicer car for the same monthly payment, but it lacks the flexibility of true ownership and also is a much more complicated financial transaction.  A purchase without a substantial down payment can seem attractive, but the longer term consequences of being upside down can be something of a trap.  A purchase deal that includes a substantial down payment may be more challenging for the buyer from a cash-flow perspective, but is financially a much cleaner transaction since with a sufficient down payment the vehicle is always worth more than is owed and therefore the owner has choices: keep it forever, sell it, or refinance it.  If one does not have cash plus trade in value of at least one third what a new car costs, then a used car is a much wiser financial decision in most cases.

[Anonymous]

My friend has decided not to take the car and honestly I'm a bit releaved. Knowing that my ex would be on the loan, and what kind of crazy shennanigans she is capable of, I'd rather not put my friend in that possition.

My Current plan is to pay early, and try to pay more than I owe to get the principle down to blue book value and then refinance, removing her name, and getting a lower interest rate in the process. 

Thanks for all the responses.

Scores: 2/17/09: EF - 536, TU - 523, EX - 518

[MattH]

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@Anonymous wrote:

My friend has decided not to take the car and honestly I'm a bit relieved. Knowing that my ex would be on the loan, and what kind of crazy shenanigans she is capable of, I'd rather not put my friend in that possition.

My Current plan is to pay early, and try to pay more than I owe to get the principal down to blue book value and then refinance, removing her name, and getting a lower interest rate in the process. 

Thanks for all the responses.

Scores: 2/17/09: EF - 536, TU - 523, EX - 518

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Yes, I think paying down the loan principal to the point where you are no longer upside down seems like the best plan.  Good luck, and remember budgeting is as much a matter of emotions as it is a matter of addition and subtraction.  As I forget who said, "discipline is remembering what you really want."

[Anonymous]

Very good side lesson here as well....NEVER co-sign a loan (unless you are trurly prepared emotionally as well as financially to take over these payments yourself). Especially don't co-sign for a girlfriend/boyfriend. Even when my credit was crappy, I would have walked to work before I would have asked my boyfriend to co-sign a car loan for me.

[Anonymous]

Boy, you said it. Co-signing for that loan was probobly the stupidest thing I ever did. When I finally got the info on the payment history for the 2 years she had the loan, she pretty much made every payment late. I've got 6 30 day lates and 2 60 day lates.

This is a very painfull, but very well learned lesson!

[MattH]

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@Anonymous wrote:
Very good side lesson here as well....NEVER co-sign a loan (unless you are trurly prepared emotionally as well as financially to take over these payments yourself). Especially don't co-sign for a girlfriend/boyfriend. Even when my credit was crappy, I would have walked to work before I would have asked my boyfriend to co-sign a car loan for me.

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I would only consider co-signing a loan if:

1. I had good reason (logical reason, not emotional desire to help them) to believe all the lenders were wrong about the borrower
2. I had a copy of the key to the vehicle
3. The legal paperwork was arranged in such a manner that I could at any time drive the car to a dealership and sell it without permission from anybody else
4. I had full web access to the borrower's payment history so I could tell when I needed to take it back and trade it in

Enabling somebody to borrow may not actually be helping them or anybody else.

[Anonymous]

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@Anonymous wrote:

Boy, you said it. Co-signing for that loan was probobly the stupidest thing I ever did. When I finally got the info on the payment history for the 2 years she had the loan, she pretty much made every payment late. I've got 6 30 day lates and 2 60 day lates.

This is a very painfull, but very well learned lesson!

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I just had to break it to a friend of mine who co signed for her sister that her credit was SHOT thanks to her sister and that she would not be getting the new car that she wanted.