Co-Signers And There Responsibilities For Auto Loans

By: Court Tuttle

First of all before I go into that it is a good rule to follow that you never co-sign with anyone. Not a friend, spouse, parent, or child. That might seem a little cold hearted but you can absolutely kill your credit if you do.

If you are a parent and can afford paying for the loan but you want to teach your kid responsibility by making them pay for it, then I don't see a big problem with that. Otherwise just don't co-sign with anyone.

Ok you can really only be in one of two different situations. First, you are the unfortunate co-signer and the person you co-signed for stopped making payments and now the creditor are coming after you.

You could also be the person that needs the co-sign and you want to get the other person off your loan so you don't screw them over if you mess up. These two I will be talking about in this article.

If You Are a Co-Signer

You are in a bad situation. That sums it up really. I mean you could try to force them to refinance the loan to get you off (which is your only hope) but if you are trying to get off the loan. Chances are they haven't been paying the loan anyway so the possibility of them getting the refinance loan is slim to none.

Now you could try to sue them but if you do end up getting the ruling which is not likely, because you signed a contract that if they default then you are willing to take responsibility of the loan. Lets say you did get a ruling in your favor. Probably the main reason that they are not paying in the first place is that they don't have the money.

So you might get some relief but after they can't get any money out of the person they will come back after you. So that probably will not work.

If you got a divorce settlement that said your ex was responsible for the loan, the creditors will not care. They will come after each of you until they are paid or you go bankrupt.

If You had Someone Else Co-Sign for You

This is the best situation to be in, because you have the most control on everything and can take action before things get bad. Hopefully you a good person and don't want to hurt the credit of the person that tried to help you. There are a few things you can do.

First you can go to the lender that gave you the loan and ask for a refinance loan on your car and just do it in your name. Hopefully you have enough history to do this. They might want the other person to be there as well and give consent to be taken off the loan.

You could also try for a debt consolidation loan and get your name on it that way. But how ever you do it just do it before things get bad otherwise you will be killing your credit as well as your co-signer.

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