I was the Cosigner on the automobile loan and the other individual let the insurance lapse on it and was in a wreck where it was totaled. The Tow yard contacted the finance company numerous times in order to turn the automobile over to them, however they did not want it. Now I am trying to find out what to do the remaining balance has been showing on my credit file since it went past due in 2005. I am in Mississippi and I believe the statue of limitations is 3 years. What can I or should I do? Thank you. I have definitely learned my lesson on cosigning.
Also what will be the worst that can happen? It would be a civil case right? I am trtying to get ahold of them to try to work out a settlement though but was also wanting to know what they can do. Thank you for all your input
The only thing that has re brought it to my attention is I got a letter in my old name at my mothers just saying it had been a while since anything was pd on it and I needed to contact them immediately, however, if I do don’t the sol start over?
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If you value your honor you will pay the note. It is what you agreed to do. people who loan money for a living said that someone was deadbeat and money should not be loaned to them, but you said no they are trustworthy, dependable and upstanding, I will prove it by co-signing for them and assuming the risk. Well, you signed the contract. Do you have integrity? You will know the answer by your actions!
There’s one thing you can do….. pay the balance. That’s what you agreed to do when you co-signed for that idiot.
The negative report will remain on your credit for at least 7 years.
Never ever co-sign again. There’s a reason why that idiot couldn’t get a loan on his/her own…. probably screwed over other creditors.
Although the statute of limitation on a contract in Mississippi is three years your loan contract may specify the laws of a different state apply. It could be as long as 10 years. Banks and finance companies are usually smart enough to have an office in a state that offers more time and the contract says that states laws apply. When you signed the contract you agreed to let the other states laws apply. Read your contract to be sure.
Also, if you cosign a loan it shows up in your credit report immediately as if you took out the loan by yourself. People think it doesn’t show up until there is a default. Not true. Any late or missed payments immediately show up in your report as if you missed them and as you found out if there is a default they come after you for the whole amount.
At any rate your credit is damaged for seven years as a consequence of the default and if the contract gives them time to take legal action they can get a court order to garnish your wages or seize any property you own. They can get a court order to have the money withdrawn from any bank accounts or brokerage accounts in you name. They can put a lien on your house or car to prevent you from selling them without paying what is owed.
Check your contract to see what the statute of limitations is for you. If they can file a lawsuit pay what is owed. Penalties and interest are probably still accruing and if you fight you could get charged for court costs and the banks legal fees.
It’s simple, really – you must pay for the car. If the bank sues you, you will lose.
You have no complaint with the person who crashed the car. You basically promised to pay for the car, and not have any value from it already. That’s what a cosigner is.
Well, the chances of them doing anything now, after they did not for 4 years is slim.
As you say, the statue of limitations MAY have expired. (Maybe not, tough to say for sure)
At this point, it might be worth it to just wait 3 more years and let it naturally run off.
You may also be able to get them to "settle" for a fraction of the balance but only offer that if they agree to remove ANYthing related to it from your credit file forever. Get that in writing before you pay a penny.
Worst case is they could sue you, win a judgment and garnish your wages. But, the fact that they have not already strongly suggests they will not.
And you may be able to get them to agree to remove it in its entirety from your credit report forever in exchange for 10-25% of the amount due.
They have already written it off. So anything you give them is "found" money.
The potential downside of offering to settle in exchange for removal is it COULD restart their collections efforts. In other words, if this guy is willing to pay something, he can probably pay more and he might be worth suing.
But, if the SOL has passed, you really have no downside for not paying other than 3 more years of the black mark on your credit.
Ask this on the "credit" board for better answers.