Friendship gone WRONG

[Anonymous]

Very odd that you didn't get a single letter in the mail from the bank stating that payments were missed. When I was 18,now 33, my brother co-signed for a car for me so I could get to college. I was 30 days late on a payment which I completely forgot about. I got a call from my brother saying he got a letter from the bank about the missed payment. You're saying 7 missed payments and zero notice from the bank? I find that incredibly hard to believe.

[SBR249]

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@Anonymous wrote:
Very odd that you didn't get a single letter in the mail from the bank stating that payments were missed. When I was 18,now 33, my brother co-signed for a car for me so I could get to college. I was 30 days late on a payment which I completely forgot about. I got a call from my brother saying he got a letter from the bank about the missed payment. You're saying 7 missed payments and zero notice from the bank? I find that incredibly hard to believe.

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I don't think there is a legal requirement for lenders to notify either the borrower or the co-signer of missed payments. In your brother's case, he was lucky that the bank was kind enough to let him know but that's not the norm. 

[FlaDude]

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The whole point of having a co-signer is that BOTH of you are individually on the hook for the payments - that's why the lender is more willing to make the loan... they can go after you BOTH for the payments.

So... "proving that you weren't making the payments" would NOT help your case here - having shared access to the online portal for the loan and either ensuring that your "best friend" paid on time, or paying it for them would have been the only way to avoid this. (Well, or refusing to co-sign in the first place!)

You also may not realize that this can go beyond just some late payments - if your "friend" defaults on the loan, the lender could try to collect any remaining balance from you, even after repo-ing the car. You'd have the lates, a repo, a collection, and might be out-of-pocket to pay it off.

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I'm guessing that you didn't/don't realize what co-signing actually means?

I agree 100%, if you cosign for somebody you should monitor the loan at least as closely as you would monitor your own accounts.

[Kree]

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@FlaDude wrote:

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The whole point of having a co-signer is that BOTH of you are individually on the hook for the payments - that's why the lender is more willing to make the loan... they can go after you BOTH for the payments.

So... "proving that you weren't making the payments" would NOT help your case here - having shared access to the online portal for the loan and either ensuring that your "best friend" paid on time, or paying it for them would have been the only way to avoid this. (Well, or refusing to co-sign in the first place!)

You also may not realize that this can go beyond just some late payments - if your "friend" defaults on the loan, the lender could try to collect any remaining balance from you, even after repo-ing the car. You'd have the lates, a repo, a collection, and might be out-of-pocket to pay it off.

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I'm guessing that you didn't/don't realize what co-signing actually means?

I agree 100%, if you cosign for somebody you should monitor the loan at least as closely as you would monitor your own accounts.

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My rule of thumb, is if I co-sign I make the payments, and the other person pays me. This way I know the payments go out on time, and if they start paying late we can have a heart to heart talk.

"But what if they just don't pay"? Rule #2, never co-sign unless you can afford the payments on your own.  Rule #3 is always write a contract.  Family is family, business is business, you can be lenient in business with family, but everyone is better off with terms on a paper.

[myscorerocks]

Do you keep track of your credit? I always recommend checking your credit before big purchases regardless. Even free sites would have notified you of the missed payments because you're also on the hook. Not sure if anything can be done at this point. Maybe you take over the car and the payments before it's repo'd? Talk to the bank about your options. You might be able to make a hefty payment and then awhile down the road you could try to write a goodwill letter. I also recommend having access to the account, so you get payment notifications or having the payments go to you ahead of time. Asking for a month or two deposit to make sure if things go awry, you're in a better position. Good luck!

[800FICOGoal]

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@DaveInAZ wrote:

Sorry, but I have to add to Hindsights: Get better friends. What kind of person gets his "best friend" to co-sign for a car loan and never bothers to make a payment and never lets their friend know they're wrecking their credit so they can't now get a car on their own. If it were me I'd convince my "friend" to loan me the keys so I can drive the car to the convenience store and get a couple six packs of beer, and then never return. Now you have your new car, just need to catch up the payments and tell your "friend": Get a life.

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Are cosigners placed on the title or just the loan? If not, then you would be looking at a grand theft auto charge.

[Revelate]

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@800FICOGoal wrote:

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@DaveInAZ wrote:

Sorry, but I have to add to Hindsights: Get better friends. What kind of person gets his "best friend" to co-sign for a car loan and never bothers to make a payment and never lets their friend know they're wrecking their credit so they can't now get a car on their own. If it were me I'd convince my "friend" to loan me the keys so I can drive the car to the convenience store and get a couple six packs of beer, and then never return. Now you have your new car, just need to catch up the payments and tell your "friend": Get a life.

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Are cosigners placed on the title or just the loan? If not, then you would be looking at a grand theft auto charge.

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Just on the loan AFAIK. 

[Lucifer]

Your story is not a unique one.

I am sorry to hear about this but like all have said - cosignor means the loan is your responsibility 100%.

The key now is to get it all under control and in time those bads will drop off your report.

As far as how to get it under control, well, you may wish to speak with your lawyer.   I don't think I would have any faith at all talking to your friend.    He has shown you who is he.    Now, what are you going to do about it.

[Anonymous]

Have you talked to this friend since finding out?

Money is such a tricky thing with family and friends