Long story short: I co-signed on a car loan a couple of years ago. I have no idea where this person is now so I can’t get in touch with him (it’s been more than a year; for all I know the guy is dead). Yesterday I got a letter from the bank & it seems he has stopped making his payments. Of course they expect me to pay now & I understand this fully. I knew there was a risk to being a co-signer so this hasn’t come as a total shock.
My question is this: Since I am legally just as much of an owner as the other guy, can I report the car stolen & let the insurance do the rest? It’s not in my posession any more & I have no way to contact the other owner. Or can I call the bank & give them the go-ahead to reposess the car?
Since a car loan is a secured loan, how will the bank proceed if neither one of us makes good on it? Will they just hand it off to the repo man & make skid marks on my credit rating or can they actually come after my personal property?
You could call the police (not 911, the other number) on whether to report it stolen, but I’m sure you’re in no better position than the bank on that: Reposession is 1% of the law. You do the finding, then just sneak up and drive it off.
Slightly OT, but if they do reposes it and sell it, you still owe the difference between what they sell it for and the outstanding loan balance. You usually get screwed on this because they sell repoed cars dirt cheap. It would be a black mark on your credit, but they should not be able to come after any other property.
You would do better to sell it yourself, but you would have to pay off the loan first. Of course its pretty difficult to sell it when you don’t have it in your possession.
There might be some legal way for you could gain possession, but it might be easier to just let it be repoed and cut your losses.
This is just my WAG, but I’d say that you can’t report the car stolen, because technically, it isn’t.
I would suggest telling the bank to repo. You are, however probably going to get a black mark on your credit for it. That’s unavoidable, since you did co-sign.
I would suggest that you use something like 1-800-US-SEARCH to find this guy, and file a suit in small claims court. If you win your case, you could present the judgement to a ban if you’re applying for a loan, and hopefully this would help your situation, credit-wise.
I’m not sure if the bank can come after your personal property or not, and that’s why I’d suggest suing the guy.
One side note. Just because you co-signed the loan doesn’t mean you’re co-owner of the car. Ownership has to do with who’s on the title. Liability has to do with who signed the security note.
Sorry, second side not. If you tell the bank you’d like them to repo the car, don’t bother an internet search or such thing. Give the bank all the info you have about the person and his family. If it’s a bank of any size, they will generally have much better resources available to them to find him than you would have. Hell, drop me an e-mail and I’ll run him through some of our search resources.
If he’s in the Chicago area, LMK. I used to do this kind of thing. I don’t do it anymore cause it made me feel dirty, but for a fellow Doper…
I would need the paperwork though! The CPD doesn’t look kindly on freelance repo men without documentation
Don’t take legal advice over the Internet. For legal advice, consult a lawyer licensed to practice in your jurisdiction.
I’m not a civil law expert by any means, but JimShep’s calm assertion that :“It would be a black mark on your credit, but they should not be able to come after any other property,” bothers me. If the company were sufficiently motivated, I don’t see why they could not sue you for the difference in value between the remaining loan balance and whatever they gain in selling the repossesed car. Once armed with a judgement, they coukld theoretically cause the local sheriff to serve a writ of fieri facias on you. This writ commands a debtor to appear and show cause why the sheriff should not seize and sell certain items of the property of the debtor in order to satisfy a creditor’s judgment against the debtor.
JimShep - any comments on why this course of action would be foreclosed?
What Bricker said, and I do practice civil law. One thing -the lawyer you need should be in the jurisdiction where the loan was made, which is not necessarily where you are now. If the bank sues you, it’ll most start the process where it is located, not when you happen to reside now.
I agree that you can’t report the car stolen, and you may not have any ownership interest in it at all, which means that a repo would be a theft, since you almost certainly don’t have a security agreement with the owner which would allow repossession.
If you won’t get an attorney, I suggest that you work with the bank to help it repossess the car. You’re still going to be responsible for an deficit, assuming that the loan documents are enforceable against you.
I have no problem with legal/medical advice from any source, as long as I understand that I am untimately responsible for acting on it.
How would you have known that if I hadn’t told you? For that matter how do the police know it isn’t really stolen? I have reported a car stolen before, about 5 years ago. The insurance company said if the police can’t find it within 30 days, they would settle a claim. How is that different in this case? In the worst case, they would report back to me that they “found” the car in so-and-so’s driveway at 123 Elm street; at least then I would know where the guy now lives.
I do have a key to the car so once they find it, I could assume ownership & take it to the bank (or wherever) myself.
Here’s how it generally works for the bank I work for: We can get possession through either voluntary surrender (you drop the car off and sign off on the title), or repossession.
If it’s repossession, you’re going to owe us more than you did before the process started. In some states (“self help” states) we need only send a 10-day notice of default and if the loan isn’t brought current we can simply go get the car. We of course hire someone to do this and charge it to you. In other states we must first get a judgment order against you before we can go get the car. That means lawyer fees in addition to repo fees.
Once we have possession we have to store it, sometimes repair it, and sell it. The proceeds of the sale are applied against the debt. Any remaining amount is referred to as a deficiency balance. What happens next depends on several factors including: The amount of the deficiency, the financial wherewithall of the those liable for the deficiency, if the parties have filed or are likely to file bankruptcy, and if any of the parties own any real estate.
If it doesn’t look like there’s any money available to us from either party, we may just write the balance off as a loss – there’s no sense in throwing good money after bad. If one or more parties are working we may seek a money judgment and attempt to have wages garnished. If there is real estate owned by either party we may choose to get a judgment and attach a lien against the property.
I guess the point of this is that every situation can be different, but, if there is any way for us, as the bank, to recoup our losses we will certainly try.
First of all, as cosigner you have the responsibility of debt. However you do not have title or ownership of the vehicle. That’s a good thing, cause otherwise you would need to pay the insurance on the car.
Best to search out the bozo that you cosigned for and take him to court. However check with the bank first, they might be able to help.
Immediate family aside, but I can’t see why a person would cosign a loan. If the bank doesn’t trust this person to pay the loan, why should you?
Frankly I don’t understand why, as a cosigner, that this would be a black mark on your record. Unless of course you can’t pay off the loan under the terms in the contract. You lived up to your end of the deal by paying off the loan and abiding by the contract. Why should you be penalized?
I’m not comfortable making any more specific comments about this, as they might be construed as legal advice, but I will say that you seem to have some fairly fundamental misunderstandings about your rights and responsibilities here. Both of the lawyers who have responded to this (as far as I know, Bricker is the only other lawyer in this thread at present) have advised you that you need a lawyer. We’re saying that because your situation has its complexities, and you run some real risks if you take the actions that you (and some others here) have suggested are appropriate.
He may or may not be on title, he hasn’t mentioned that yet. But as you and I have mentioned, just being a cosigner doesn’t give him any interest in the car.
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As cosigners, both parties are equally liable for the satisfactory completion of the terms of the contract. That means timely payments. This has probably already affected Attrayant’s credit report.
On some loans, as opposed to a cosigner, we will accept a guarantor who is not responsible for the monthly payments - so we don’t report on their credit bureau - but is liable for any loss we may suffer in case of default.
I did not mean to imply that I am a lawyer or have vast knowledge of the law. I have known several people with lots of debt and repossed cars and none of them have ever had a creditor try to seize their property. The fact that these people had nothing worth taking may have had something to do with it.
What I meant is the could not come after your property without legal process, and they are not likely to bother. That is they can come and take the car as soon as you miss X payments, but they can’t come into your house and start taking stuff without a court order. ** I apologize for my misleading and (mostly) wrong statement** (That was harder than I thought.)
Of course, the bank probably doesn’t know or care whether you have an ownership interest in the car. Are you on the title? If not, you probably don’t (although you still should consult a lawyer if you want to make sure). Good luck!