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Friendship gone WRONG

Established Member

Re: Friendship gone WRONG

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.
Message 11 of 14
Established Contributor

Re: Friendship gone WRONG


@Timberland 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.

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. 

Message 12 of 14
Contributor

Re: Friendship gone WRONG


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.

 


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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Message 13 of 14
Established Contributor

Re: Friendship gone WRONG


@FlaDude wrote:

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.

 


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.


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.

Message 14 of 14