Co-signer on car loan

[rvbca]

Four years ago (1998), my son co-signed with his then mother-in-law for a car. Got divorced six months later. Mother-in-law died in Jan 2002 - spouse called reference the car - wanted him to pick it up and make payments. Spouse provided an account, phone number and Bank handling the account. After numerous inquiries, my son was repeatedly told his name and SSN is not reflected on their account info. Two weeks pass, and a Collections manager from the bank starts calling and demanding payment. When asked why two weeks previously, we were told he's not on the account - the reply is our paperwork was messed up. Have asked for copies of the paperwork. Found iout the car is titled in the deceased name only. If the car is Titled in her name only, and I cannot obtain the loan paperwork what is my options? Her husband wants me to "pick up" or else he's going to "drop off" the car - but if it's not in my name - can't they claim that I stole it? Is it proper procedure for the bank to call instead of sending a letter? Account is not listed on any credit reports (just received three different ones). What are the ramifications of voluntarily reposession or bankruptcy?

 

[Michael Wechsler]

I'm very confused by your story, which is a bit in shorthand. It would seem that possession of the car passed to the woman's estate, which may now have passed to the surviving spouse. If this is the case, have you spoken to him about having them sign the title to the car over to your son? You should be able to get copies of the loan which the bank says your son co-signed. You may want to send requests in writing and also state all the facts regarding the mix up that you believe occurred. Note, that once you put something in writing, this could work against you if you are wrong so you'd want to be very careful when you do this. You also want to send the correspondence via some method of certified delivery. In this instance, if there are further mistakes on the other party's end, they will be responsible for those mistakes as they have been duly notified.

 

[rvbca]

Both the spouse and the Collections Manager have not been cooperative in providing a copy of the loan application. Last week, the Collections Manager finally sent page 1 of the loan application, a xerox copy of the title (1998); an statement of intent by the deceased to provide insurance for the car (1998) and a hand written note on the fax cover letter stating he does not think the car was refinanced. My son called the spouse to see if he can get the Title changed - the spouse isn't sure who can do that. Normally would a Collections Manager call a phone number (which was provided by the spouse two weeks after he called to inform us that his wife and died) or would they send a letter? Why is it that on Feb 2, 2002 after we called the various numbers to the bank - they all searched the files by name, ssn, account number and VIN # - we were told by three (3) different persons that there was no record of my son being on the account? On the initial call by the Collections Manager - the car was two months without payment - when the spouse called us on Feb 1st 2002 the car was one month behind. Two years agor, a mutal friend of my son and the deceased told my son that she was buying his old car, and hoped that he didn't mind. We are trying to locate her and see what happened. Are we asking to much to obtain a copy of the paperwork?

 

[Michael Wechsler]

To begin, if the creditor is trying to pin your son with the requirement to pay for the loan, then there is no reason for your son to pay it back as the debtor. You might want to state this clearly, and also point to independent evidence asserting your conclusion. You should also question the Collections Manager's ability to collect on a loan that he is unable or unwilling to provide you with any of the criticial documentation which would truly reveal the identity of the debtor(s) and how the matter can be resolved.

Even if the car was "signed over" to you by the spouse or the deceased's estate, it would seem that the car will likely be repossessed unless payments are made. The surviving spouse needs to take care of business.

 

[rvbca]

Again, thank you for your response. The Title is in the deceased's name - it was retitled in Aug 2000 - and the Collections Manager can not explain it; also does not understand why my son does not want to "take" the car - cannot take car while Title is in the deceased's name. Another Collection Manager called yesterday and when my son asked about the Title, etc. she referred him to the original dealer for a copy of the paperwork. She then told him that the deceased spouse told them to go after my son - because he didn't want anything to go against his wife's Estate; she also confirmed that no one checked to see why car was Retitled in Aug 2000; nor did they check to see if there was any optional insurance on the loan. It appears there's a lot of loose ends that needs to be resolved. Can my son refer them back to the Deceased's Estate?

 

[Michael Wechsler]

If the title to the car is only in the name of the deceased and there is no proof provided to you that your son is a cosignor, then I'm not sure why they are bothering with your son at all. If he cosigned and it's just a matter of time... well, then there are issues here since he might be on the hook. Do remember that it is not uncommon for bill collectors to receive a percentage of the debt recovered and they may try to convince you and your son to pay for all the wrong reasons.

My point is that if you are being billed and the car isn't even in your name, why bother paying for it if you aren't liable? Just make sure you aren't and, if you are, make sure that the estate corrects the earlier mistake by signing over title to the car. Who is the executor of the estate?

 

[rvbca]

We think the spouse is the Executor of her Estate - he will not tell us if she left a will. He told the Collection folks that my son wanted the car - and that he does not want anything to go against her Estate. Collections Manager fax'd a very illegible copy of the note - the very fine print indicates two additional premimums were added to the selling price. But, will not provide all paperwork or one that is legible. Collections Manager told my son the pay off the car and THEN they'll change the Title.

 

[Michael Wechsler]

Ridiculous. You might as well tell the spouse/administrator/executor of the estate that he has no choice in the matter. First, her will should be available if filed in surrogate's court. Second, his not telling you whether she had a will just makes it more likely that you might have to make this a legal issue -- if your son is a cosigner on the loan, he could and might be best to sue the estate for his having to pay if he doesn't have the car. The Collections Manager is a comedian. There is no way you want to pay on a car that isn't yours! You will pay if the car is[\i] yours! You might send a fax back to the manager that, unless he sends you all copies of the documents instead of providing you with smoke and mirrors, you will not only refuse to pay but will also report them to the state attorney general as well. Most importantly and what should be made clear, there is no reason for you not to be provided with the paperwork and their failure to simply provide the basic paperwork creates more than a reasonable suspicion of something awry and question the validity of the debt.

If your son did co-sign he should know.