Hi, welcome to the forums.
Normally you wouldn't be able to negotiate a settlement until it's in default. What you would be looking to do is a voluntary repo. It will affect your credit the same as a normal repo.
Basically, you'll turn in the car and they'll auction it off. The balance plus fees (towing, repo, auction, storage) will be billed to the two of you. At that point, you can negotiate a settlement. While this is going on, the payments will still be due and reported as in default if neither of you pay it. It would be best to avoid that if possible. Maybe try selling it to reduce out of pocket losses.
I can't say for certain as every account I have settled has reached a charged off status. I would imagine it depends on how the account gets reported. If it's reported as a charge off and then settled for a lesser amount it will greatly impact your score negatively.
@Anonymous wrote:Thanks! However, it is not an auto loan - just a personal loan.
🤦 I don't know why I thought auto. The co-signed part is probably what threw me off.
What lender is it?
@Anonymous wrote:I am a co-signer on a loan. The primary has encountered a life-changing emergency and will no longer be able to pay anything.. If I reach a settlement - how will that impact my credit score. The account is current - and I otherwise have very good credit. Thank you!
It will adversely, and seriously, impact your credit score. You should treat it as though it's your own debt, and pay it.
