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Cosigner on a defaulted auto loan

11bmac
New Contributor

Cosigner on a defaulted auto loan

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.
Beginning Fico Scores in January 2020: All were around 580-590
June 2021 Fico8: TU:694; EQ:713; Ex:684, Cap1 Quicksilver $2900, Cap1 Platinum MC $1100, BofA Cash Reward Visa $2000, AmEx Delta Skymiles Platinum $1000, AmEx Everyday Preferred $1000, Discover IT $4200, Services CU $1000, Citi Rewards+ $6200 Citi/BrooksBrothers Store Card $2500
Message 1 of 12
11 REPLIES 11
Slabenstein
Valued Contributor

Re: Cosigner on a defaulted auto loan

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?


Message 2 of 12
11bmac
New Contributor

Re: Cosigner on a defaulted auto loan

Yeah thats what I figured. Its still with the original lender as of now.
Beginning Fico Scores in January 2020: All were around 580-590
June 2021 Fico8: TU:694; EQ:713; Ex:684, Cap1 Quicksilver $2900, Cap1 Platinum MC $1100, BofA Cash Reward Visa $2000, AmEx Delta Skymiles Platinum $1000, AmEx Everyday Preferred $1000, Discover IT $4200, Services CU $1000, Citi Rewards+ $6200 Citi/BrooksBrothers Store Card $2500
Message 3 of 12
Slabenstein
Valued Contributor

Re: Cosigner on a defaulted auto loan

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.


Message 4 of 12
11bmac
New Contributor

Re: Cosigner on a defaulted auto loan

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!
Beginning Fico Scores in January 2020: All were around 580-590
June 2021 Fico8: TU:694; EQ:713; Ex:684, Cap1 Quicksilver $2900, Cap1 Platinum MC $1100, BofA Cash Reward Visa $2000, AmEx Delta Skymiles Platinum $1000, AmEx Everyday Preferred $1000, Discover IT $4200, Services CU $1000, Citi Rewards+ $6200 Citi/BrooksBrothers Store Card $2500
Message 5 of 12
pizza1
Community Leader
Super Contributor

Re: Cosigner on a defaulted auto loan

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

My rebuild worked for me, but won't necessarily work for you!
BK7 D/C- 08/2013
Message 6 of 12
OmarGB9
Community Leader
Super Contributor

Re: Cosigner on a defaulted auto loan


@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 @11bmac.


Last App: 05/30/2021
Capital One Auto Refinance Loan

Currently rebuilding as of 04/11/2019.

Starting FICO 8 Scores:




Current FICO 8 scores:


Message 7 of 12
11bmac
New Contributor

Re: Cosigner on a defaulted auto loan

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.
Beginning Fico Scores in January 2020: All were around 580-590
June 2021 Fico8: TU:694; EQ:713; Ex:684, Cap1 Quicksilver $2900, Cap1 Platinum MC $1100, BofA Cash Reward Visa $2000, AmEx Delta Skymiles Platinum $1000, AmEx Everyday Preferred $1000, Discover IT $4200, Services CU $1000, Citi Rewards+ $6200 Citi/BrooksBrothers Store Card $2500
Message 8 of 12
Bankrupt2019
Established Contributor

Re: Cosigner on a defaulted auto loan

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









Message 9 of 12
OmarGB9
Community Leader
Super Contributor

Re: Cosigner on a defaulted auto loan


@11bmac 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...


Last App: 05/30/2021
Capital One Auto Refinance Loan

Currently rebuilding as of 04/11/2019.

Starting FICO 8 Scores:




Current FICO 8 scores:


Message 10 of 12
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