Cosigned loan now defaulted

[onimusha115]

Here's the story,

My girlfriend cosigned for a truck with her ex a few years ago before we started dating. Once they broke up she removed his name from the loan for her car and had asked him to do the same on his truck a good 3-4 times, but he kept saying he wasn't able to find another cosigner. Now two and a half years later and almost no contact with him she receives a letter in the mail from the bank saying his truck was repossessed and auctioned for 6,900 dollars and she owes the remainder plus repossession and auction fees, a grand total of over 7,500.

He never had the common decency give her a heads up that this could be happening. Nor did she get a notice from the bank before this, this letter is the first notice she has received. She does not have his contact information but managed to reach his mother and was told he filed for bankruptcy, so I assume that's how he lost his truck but now she is stuck with the remainder.

I guess the question is, is there anything she can do to fight this or reduce the amount owed? I would have thought she would get some notification from the bank prior to this, it just doesn't seem right that he can wash his hands of the matter and she gets stuck with it. She was pretty much blindsided by this, he had been paying regularly with no problem for almost 3 years now and kept refusing to put much effort into taking her off the loan. Is it possible to go after him personally? We have no idea what to do and I'm not sure she can afford to pay the loan back, especially not up front.

Thanks in advance for any responses.

 

[army judge]

Her name was on the loan.
He screwed her, or she screwed herself.
All she can do is pay the debt.
She can then sue him.
I doubt that the bum has anything.

If the divorce decree supports what you allege, that is one way out of this.
If it isn't in the decree, she's stuck.
If it is, she can show that to the lender.

Otherwise, get your checkbook ready.

She should have stayed on top of this year's ago.
She didn't have to wait for him to ask them to take her name off the debt.
Which, by the way, was a request.
A request they did not have to honor.

You could also try and offer the lender an offer in compromise.
you could offer them $4,500 to settle the entire debt.
If you do, don't pay until it is in writing and signed by both parties.
Also, don't negotiate with a collection agency or pay a collection agency.
Negotiate ONLY with the lender and pay the lender.
If a collection agency is sniffing around after the debt, the lender has written the debt off long ago.
Paying them (a collection agency) won't help her credit anyway.
Paying the lender will, a little.

 

[onimusha115]

Thanks

Thanks for the quick reply. Unfortunately it was the response we expected, shes stuck paying it. She wasn't married so there is no divorce decree to hold up in court, and unfortunately we don't have the funds on hand to offer a larger chunk up front.

I believe she is dealing with the lender directly because it was the bank that sent her the letter telling the amount due, and when she called she was just transferred to their bankruptcy department. I guess they are having her pay on the original loan and then transferring it into her name alone after 2 full payments.

If she decides to try to sue him for the money she pays out towards it will it be a hard case to win? I have read that it's near impossible to get the courts to rule in your favor unless you have a written agreement that he would pay her if she became responsible for the loan, or if he were to start making her payments therefor admitting that he is responsible for it. But like you said, he probably doesn't have any money to fork over for it.

Thanks again for the quick response, it was much appreciated.

 

[army judge]

Maybe, she should investigate filing bankruptcy?


If she did, she could include this debt along with all of her existing debt.

Just for future reference, she should have called the lender and told them she wanted off the loan.

Finding another lender would have been his problem, because that would have taken her off the hook.

The lender would have taken the truck and gone exclusively against him!!!

 

[mightymoose]

She also needs to verify the last date a payment was made on the car. If she wants to, rather than paying the money she can try to wait it out. If they don't seek a judgment to order her to pay then she will get a negative mark on her credit for 7 years, but will be off the hook for paying. Once she makes a payment that clock starts over though.
Otherwise pay the money and sue the other dude for what you are out. If you get a judgment against him then you can garnish his wages.

 

[onimusha115]

Thanks for your input as well, we may look into talking with a lawyer about suing him for what she will be out.

 

[jharris352]

There is one way to fix it. It may work it may not.

Write a check for $100 to the lender. On the back of the check print: "Endorsing and cashing this check indicates acceptance of the settlement offer and a paid in full balance."
Send a letter along with the check and reference the check number and amount in the LETTER. Something like, "Enclosed is check number XXXX drawn on Chase Bank and dated XX Month, 2010. We are unable to pay the entire amount of the debt owed and this is our best offer to settle the debt to a zero balance."

Now you may think they will not accept this, and they probably won't. But there is a fair chance that they will cash that check either before they read the letter or despite the letter. You may get back a response like, we can't accept that amount as full payment but we will apply it against your balance.

The minute they cash that check they are STUCK. You made an offer, with consideration and they accepted it and cashed it. They either have to decline and return the check or if they cash the check the balance is a zero balance.

Take the canceled check and the letter and send it to all three credit bureaus with a request to correct the balance and payment of that loan. They will do so, if they don't they will owe you $1000 per trade line mistake.

Now this is my secret process and I only give it to certain special people, so shhhh, don't tell anyone or it will get overused.

 

[army judge]

Now this is my secret process and I only give it to certain special people, so shhhh, don't tell anyone or it will get overused.

How very thoughtful to share your "secret process"!

:angel:coolio::cheer:

 

[jharris352]

I've often thought about doing that as a moneymaker. You see how it works don't you? Most companies separate the check and the letter at the mail room and immediately cash the checks. After that they are STUCK.