Delinquent Co-Borrower: Getting Title To Car to Prevent Further Credit Damage

[danc2050]

Jurisdiction

Washington

I co-borrowed a car with my sister so she could afford a vehicle. She had a history of delinquency with payments and her credit score was wrecked. She was making progress again, so I helped her, thinking that she would persist her change.

Since then, she has become delinquent and devolved again, affecting my credit score.

I am seeking a legal solution to transfer the title of the car in my name. A few facts about a potential case:
- I won a small court claims against my sister (for another reason) with a total $5k+.
- The amount owed on the car is still ~$14k, and I am seeking the title as I would like to prevent further damage to my credit score with her missed payments. I would like to rent the car out to pay it off.
- We are both co-borrowers on the car with equal rights, though I have never driven it, and she is the only user as far as I know.
- It is currently financed in both of our names.

Is this possible? If not, I will take the car and rent it out for half of the week.

 

[Zigner]

It doesn't work that way. She has the same rights to the car as you do. If you want to avoid further damage to your credit, you'll have to work with her, or simply pay off the loan.

 

[adjusterjack]

Since then, she has become delinquent and devolved again, affecting my credit score.

Regardless of the eventual solution to your problem, the way to save your credit score is to make up the payments that she didn't make and bring the account current. The longer you wait, the further down your score will sink.

I would like to rent the car out to pay it off.

Your insurance won't allow it. You'll have to take out a more expensive policy like car rental companies have. If you do it and conceal it from your insurance you'll be cancelled and insurance will cost you more. If you do it and conceal it and there is an accident your insurance company will rescind the policy back to its inception and leave you to pay the claim with your own money.

One option is to pay your sister to sign over the car to you. You probably don't like that idea, but anything else is likely to have worse consequences.

 

[zddoodah]

I co-borrowed a car with my sister so she could afford a vehicle.

I think what you mean by this is that your sister bought a car, using a car loan, and that you co-signed the loan. Correct? If not, please explain what "co-borrowed a car" means.

I am seeking a legal solution to transfer the title of the car in my name.

Not going to happen - unless, perhaps, you take an assignment of the loan and the lender's rights under the loan. To do that, you'll likely need to pay the loan in full. The only other possible alternative would be if you have a written contract with your sister that allows for that. Does such a contract exist?

We are both co-borrowers on the car with equal rights

What does this mean? Being a borrower on an auto loan does not confer any rights on you.

If not, I will take the car and rent it out for half of the week.

In the absence of some sort of contractual right to do so, unless the car is titled in your name (which your post clearly implies is not the case), you have zero rights to take possession of it.

 

[army judge]

OP, this issue is easy to avoid.

How?

NEVER become a guarantor or cosigner on a loan for ANYONE.

Banks are very clever.

By allowing a cosigner, a deadbeat can acquire a thing(s) of great value, leaving the helpful cosigner mired in the filthy, muck of debt.

 

[danc2050]

> She has the same rights to the car as you do
Does it not matter who pays more of the loan? @zkdooah this is what "co-borrower" means, that you both put up your credit score and both have an equal stake in the vehicle. Google can tell you the rest, but we are both on the contract when buying the car. It's different from co-signing, where the co-signer has no stake in the vehicle. I have tried to talk to the car company who sold and financed the vehicle with us asking if they would transfer the title in my name if I paid the vehicle in full, but they said that I could only refinance it, but that wouldn't affect the title according to them.

> the way to save your credit score is to make up the payments that she didn't make and bring the account current.
My credit score is affected by missed payments, not how long the missed payment is for, I believe (I am assuming since my score remains the same each day post-missed payment). I'm not sure if your response is reflecting that or not. She has only missed one payment (though she is perpetually a payment behind already, they don't report then).

> Your insurance won't allow it. You'll have to take out a more expensive policy like car rental companies have.
She does ride-sharing already, and she is the one who insures the vehicles (probably monthly), so the insurance is in her name. Her insurance may cover it... That being said, car sharing platforms like Turo require that one buy insurance at minimum I believe...that or they pay a lot if they damage the vehicle. But I realize that wouldn't fully cover the vehicle either, so your other points are noted on the consequences of such an action ASSUMING that her/the insurance doesn't cover it.

Thanks, Army Judge. I am looking for what, if anything, could be done now though.

I guess one question on my mind was: could I use the small court claim to take over the car? Since she's not even paid $5k, is it possible to open a civil case that takes the title of the car into my name as payment for that small court claim?

 

[army judge]

Thanks, Army Judge. I am looking for what, if anything, could be done now though.

You could ATTEMPT to repossess the vehicle.

As you recently determined, you're coequals insofar as ownership (usage or possession) of the vehicle is concerned.

However, you'd have a difficult time preventing the other party from repossessing the vehicle you repossessed from her/him.

Tit for tat is very often a poor strategy that often escalates into violent acts.

You could offer the deadbeat money to sign over her rights in the vehicle to you.

Her track record is very poor, so that might not work as planned.

She's running up the mileage on the vehicle, which accelerates the depreciation insofar as any resale value of the abused hoopty.

The extra mileage is also running out the factory warranty, which sooner or later leaves someone with thousands of dollars in car repair bills to keep the abused hoopty running.

There's only one winner here, mate, the deadbeat.

Funny how deadbeats always seem to prevail over kind hearted, tender loving people, ain't it?

Small Court won't resolve your problem, mate.

Even if you prevailed, received a judgment for $10,000, I very much doubt that you'd never get $1.00 out of a lifelong, certified dud, deadbeat.

 

[zddoodah]

Here's a simple question:

Who is identified on the title as the owner(s) of the car?

 

[adjusterjack]

I have tried to talk to the car company who sold and financed the vehicle with us asking if they would transfer the title in my name if I paid the vehicle in full, but they said that I could only refinance it, but that wouldn't affect the title according to them.

If you had the cash to pay off the balance you wouldn't have to refinance but the lender would just release the lien on the car. The title would still be in both names. You would still have to get the other owner to sign it over to you.

My credit score is affected by missed payments, not how long the missed payment is for, I believe (I am assuming since my score remains the same each day post-missed payment). I'm not sure if your response is reflecting that or not. She has only missed one payment (though she is perpetually a payment behind already, they don't report then).

The implication in your tone was that it was more alarming than that. True, one month behind might not affect the score.

She does ride-sharing already, and she is the one who insures the vehicles (probably monthly), so the insurance is in her name. Her insurance may cover it.

Ride sharing is not the same as renting out the car. Ask your insurance company.

I guess one question on my mind was: could I use the small court claim to take over the car? Since she's not even paid $5k, is it possible to open a civil case that takes the title of the car into my name as payment for that small court claim?

Small claims court is only about money.

Small Claims Court | Washington State

As Army Judge says, you can win a judgment for dollars but you might never see a nickel of it. Besides, no court is going to reform the title when there is a loan on it because it would be interfering with the rights of the lender. Nor would a court strip her of ownership because that would be a "taking" without due process. All you can hope for is a judgment for dollars, if you can prove that there was a contract between you and that she has breached it.

If you paid off the loan and the lien was released and then you sued her for X dollars, being sued for money might scare her into settling with you by giving you the car and signing the title.

 

[danc2050]

Thanks ArmyJudge. What you said was pretty accurate. I did indeed win a small claims court for over $5k and attempted to garnish her, but for whatever reason the debt collection agency (Debt Collectors International) didn't want to take the case. Probably because of her bad history in the first place. One can drive for Lyft and Uber and be garnished...but maybe she is hiding most of her wages in her freelance photography work.

AdjusterJack -- I do have the money to pay off the car, but as you said the title would be in both of our names. I guess my tone is alarming, since this is actually the second time she missed a payment. The first time, we were caught by them not posting what timezone their payment processors were on (eastern time). I threatened to sue and they took the missed payment off my and her credit report. This time it wouldn't be so easy, however, as she honestly missed a payment. It's more alarming since she is always a payment behind, so literally if she spaces at any payment there goes another something on my credit report for 7 years...

Noted about the ride-sharing vs renting.

I would pay off the loan if I really could be guaranteed I could get the title of the car. Like, for example, I say "I paid the car and the remainder is the amount you owed from my small claims court". But it doesn't sound like there is a guarantee on any of this...

My plan now unless I learn of something else is to put a GPS tracker on it, take it part of the week, split the payments with her, and hope she doesn't make enough anymore and finds a real job again like she used to have.

 

[army judge]

My plan now unless I learn of something else is to put a GPS tracker on it, take it part of the week, split the payments with her, and hope she doesn't make enough anymore and finds a real job again like she used to have.

You're being taught a very expensive life lesson.

I rarely say YES to anything.

I generally say NO.

Such a simple word, such a small word, but ever so powerful.

Saying NO works much like garlic does in repelling vampires, NO repels deadbeats, because if an organism fails to receive a positive, encouraging response, it'll cease it's troublesome behavior for lacking sufficient reinforcement to ask you for continued, never ceasing financial help.

No, makes YOUR life calmer, quieter, less disturbing, more wealth for you, too!!!

 

[adjusterjack]

I would pay off the loan if I really could be guaranteed I could get the title of the car.

Well, obviously you don't pay it off without getting title.

You take her, the car, all the keys, and the title, to the lender's office. Then, with keys and title (properly signed), in hand, and appropriate forms signed, then you hand over the check to the lender.