Cosigner Issues - Trying to fix credit

Discussion in 'Credit Talk' started by Amanda12, Feb 20, 2014.

  1. Amanda12

    Amanda12 New Member

    Ok, so a few years ago I cosigned on a car loan so my boyfriend(at the time) could get a car. We have since separated and naturally he stopped paying on the car and they repossessed it. The creditor is now coming after me for this because I cosigned and he(the ex) isn't working. I am currently trying to get a new car of my own, but this has really hurt my credit score and is preventing me from doing anything. Is there a way to get this off of my record or am I screwed? I really don't want to pay for a car that I didn't even get to drive. Is bankruptcy an option? I have a couple other negatives on my record(nothing nearly as bad as this one) too, but I don't want to waste my time trying to settle those if my credit is screwed regardless. I need advice!!!
  2. mindcrime

    mindcrime Well-Known Member

    Unfortunately, you're in sticky situation. This isn't like being an AU (authorized user) on an account where you can simply wash your hands clean of an account if the account holder goes delinquent. You, being a co-signer are equally responsible for the payment, and now that the vehicle is repossessed, it seems the creditor is coming after the signer with the most potential -- you, for the remaining balance.

    It's going to be very difficult to get financed for another vehicle with an unpaid repossession on your reports. And unless we're talking about a lot more in debt you have going on -- ten's of thousands -- bankruptcy wouldn't be a good path to take. Your only recourse that I am aware of -- and perhaps if someone on the board has more experience with repo's can chime in -- is going possibly going after the co-signer. Is what is left owed something you can pay yourself? I realize this isn't what you want to hear, BUT if you can pay off the balance, do this with negotiating for a PFD. I realize you don't want to pay a dime, BUT (jam, help me out here) I wonder if you can then go after the co-signer in small claims for at least 50% of what you had to pay to make good on the loan.

    In the meantime, don't ignore the other negatives, depending on what they are and how old they are, you could do some house cleaning in the interim. List what you have going on so we can better guide you.

    Welcome to the board.
  3. Amanda12

    Amanda12 New Member

    Thanks for replying. Unfortunately that's what I figured. Does anyone know if taking a cosigner to small claims has ever worked? That may be a good idea.

    As for the other issues, there's not a lot. Just "young and naive" mistakes.

    1. a phone contract(also the ex's doing) - Approx $700
    2. an outrageous medical bill I got caught off guard with. Went to the ER to get checked out, but didn't realize I was going to get raped. - approx. $1800
    3. an old retail store card for maybe $100 (this one is my fault, I just forgot about it)
    4. the car loan(main topic) approx. $6000

    So I think it's about $8600 total, probably not enough to justify bankruptcy. My thoughts would be to contact the collectors for #1 and #3 and see if we can settle on some amount to get them taken care of, then continue to dispute the medical bill. I didn't want to start anything until I got some advice first though.

    Does that seem like the route to go?

    Also, if I were to get a cosigner for a car loan now, would that help in fixing my current score? Or is it a lost cause until this car is off my record?

    I'm not so upset about having to pay for the car(it was my dumb mistake to sign for it), the biggest issue I have is paying to essentially give him a FREE pass(once I pay it off it would be off his record as well I assume) That just isn't right. Thanks again!
  4. mindcrime

    mindcrime Well-Known Member

    I think this question is best answered by jam237 -- our resident "master" here. He's extremely knowledgeable, and has helped many in various situations.

    Who's the OC, and what's the DOFD. Also what is your states SOL?

    How old is this debt? Have you sought out any financial assistance programs? (guessing you did not have insurance/job at the time?) I believe a number of hospitals have these sort of programs and depending on your situation you could qualify for up to 100% of it written off. Also is this the OC reporting or a CA?

    Same questions, how old is the debt, and if it's just the OC reporting, try to negotiate a PFD. If it's out of SOL you stand a better chance at this.

    At this point, you would like need a co-signer. Have you pulled your reports? Do you know your FICO's? Having another positive TL WILL help your score, but only slowly and gradually. Negatives (even just one 30-day recent late) KILL scores (could be a 3-digit drop) so don't expect a miracle jump just by being a co-signer on a new car loan, but, as I said, if you need a new car now, this is likely your only way to go. Otherwise (if you could even get financing on your own) you'd get killed with 25%+ interest rates.

    Not really off his record. It would show as paid, but still be listed as a negative account for 7 years from the DOFD. IF you were to somehow work out an agreement with the creditor with settling the repo (by paying) with a PFD, you don't have to include the request to delete their reporting on his reports! ;)
  5. jam237

    jam237 Well-Known Member

    You can always attempt legal action based on their nonperformance with the terms of their original contract, to try to recoup your losses from having to carry out your security role in the contract.

    You are in the best position if you've paid or been sued and ordered to pay under the contract by the original creditor.l because of the co-signees nonperformance.

    Here's where it gets sticky with defenses.

    Plaintiff needs to mitigate damages as much as possible, but if the original creditor hasn't notified you of potential default and you would preemptively pay an account you could get stuck.

    BTW: standard disclaimer applies, I am not an attorney and I do not provide legal advice.
  6. BCOHEN2010

    BCOHEN2010 Well-Known Member

    For a deficiency balance of $6000, the creditor is going to do more than "come after you for this", they're very likely to sue. At this point, I would recommend taking a wait-and-see approach, and trying to save up some money to buy a beater outright.

    Unless you make so much money that you could afford to throw away $6000 or more, I would not be so quick to discount bankruptcy as an option. If and when you are sued, you can file for bankruptcy, and avoid the hassle and expense of having your wages and bank account(s) garnished.

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