The fact that someone needs a co-signer usually means one of two things, maybe both.
1. Their credit isn't very good
2. They're trying to buy something they can't really afford.
You should never co-sign for anyone unless you plan to make the payments yourself. ESPECIALLY, a boyfriend or girlfriend. Hopefully she can get this straightened out. Maybe she can convince him to refinance the loan to himself. Might be a long shot now, if he's even willing.
How much is left to pay on the dirtbag’s car loan?
How much of a balance is she carrying on the WalMart card?
What other cards does she have?
If one Co-signs a loan, one needs to be prepared to take over payments to keep it current. That is an option here.
Paying off the WalMart card and using another, like Capital One that is less likely to pull AA should also be considered. The goal of a mortgage, however, is a challenge. This loan obligation would show up on a mortgage app anyhow, whether current or late, so as long as the loan is out there, it will have an impact.
And really, from the mortgage lender perspective, she agreed to an obligation and then did not meet it. That is what makes this so difficult to clear up.
Maybe small claims court is necessary? Legal advice for sure.
How much of a balance is she carrying on the WalMart card?
What other cards does she have?
If one Co-signs a loan, one needs to be prepared to take over payments to keep it current. That is an option here.
Paying off the WalMart card and using another, like Capital One that is less likely to pull AA should also be considered. The goal of a mortgage, however, is a challenge. This loan obligation would show up on a mortgage app anyhow, whether current or late, so as long as the loan is out there, it will have an impact.
And really, from the mortgage lender perspective, she agreed to an obligation and then did not meet it. That is what makes this so difficult to clear up.
Maybe small claims court is necessary? Legal advice for sure.
Stop the lates is what has to happen. I would demand that he refi into his name alone or take the car from him and do with it whatever needs to be done.
In the world of co-signing, she is literally as responsible for that debt 'the car' as he is. Regardless of personal circumstance, level of his stupidity, or amount of he said she said it doesn't hold any weight. To a court and to the banks, they share the debt until it's refinanced in only 1 persons name, or paid off in affect.
A few things that come to mind for me are that:
1. More than likely, she'll be paying this car off until it's just that, paid off.. which leads to the issue of who's car does it become.
2. Once paid off, if it becomes paid in full, more than likely both her name and his name are on the registration due to it being co-signed. I'm not sure of your state, but this makes both legal owners. This creates thought #3 in my mind:
3. Small Claims court depending on the value in the end.. since both are possibly 50% owner, she'll want to get (Again if this gets paid off) the equity out of the vehicle she paid into it, and possibly sue him for repayment of all that he defaulted on, causing her to pay for him.
No matter how you view this, plan this, or put the pieces together that you're missing... due to the legally binding contractual responsibility of her signature she's stuck between that rock and very very hard place like others have mentioned. She must do her financial best to stay in good graces of the bank for her own future well being. I would suspect there is no recourse on this until the vehicle changes names or is paid off, then that's when more legally could be pursued.
@Anonymous wrote:Better to have a "Closed By Consumer" note than a "Closed By Creditor." If it hasn't been suggested, close it before they do. You can always apply again when this situation is resloved.
Not in my experience. I have several closed cards, including closed by lender to open a new account number, closed by lender after balance chasing, and closed by me to freeze terms on open balances. I have never noticed any difference in apps, no comments from banks asking about those closed by lender. A closed card is just no longer an obligation.
The advice to “act now to close the card before the lender does” turns up regularly here. It is not useful advice. Sorry, just being clear about it.
To OP, an attorney is the next step, as you seem to already know. Tough to hear about these situations. We all hope it turns out well for her.