Legal Question in Credit and Debt Law in California

co-signed an ex friends motorcycle loan

My daughter is 21, and she cosigned a loan for a `friend' to buy a motorcycle. The `friend' has basically disappeared after making only one payment and my daughter is now getting the bill and collection calls. She says the salesman and her friend told her she would be removed from the loan after three months. But now the dealer says that salesman no longer works there and that doesn't apply. She has no paperwork or anything and the loan co is sending her the bill. She would gladly allow reposession but only knows the friend's parents address. My daughter has a learning dificulty which results in very low reading comprehension and she really didn't know what she was getting herself into. What is the best option now? Should she call the police and report the friend for theft? Is bankruptcy an option. She only earns about $800 a month and the loan amount is approx $8k


Asked on 11/18/08, 7:07 pm

2 Answers from Attorneys
Bryan C. Becker Your Lawyer for Life.

Re: co-signed an ex friends motorcycle loan

In general, a cosigner has the same defenses and counterclaims to the deficiency action as are available to the principal obligor, including bankruptcy.

However, a cosigners obligation may be voidable if it is induced by a fraudulent or material misrepresentation by the obligee on which the secondary obligor is justified in relying. For example, nondisclosure of facts unknown to the secondary obligor that materially increase the secondary obligor's risk may be considered material misrepresentation.

Also, if your daughter is being harassed by the collection companies she may has options available under the FDCPA & FCRA.

If you would like to discuss this further, please do not hesitate to contact me.

Yours truly,

Bryan

619.400.4929

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Answered on 11/18/08, 9:21 pm
OCEAN BEACH ASSOCIATES OCEAN BEACH ASSOCIATES

Re: co-signed an ex friends motorcycle loan

If this matter has not been resolved contact me immediately.

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Answered on 12/16/08, 4:32 pm


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