Legal Question in Credit and Debt Law in California

Credit related question

Hi, I co-signed a friend last year to purchase a vehicle. At that time she owed an additional $4000 to the vehicle she traded in thus financed the vehicle, TTL, and the additional amount owed. A few months later, I learned that she has been behind on the current loan as well. Obviously, as a co-signer, my credit is being adversely affected. The vehicle is on the verge of repossesion so I decided to take it and make the payments myself--I now owe $19000 on a vehicle that is likely workth $8000. My question is whether it will be better off for me to have the vehicle repossessed instead? If it is taken by the bank, will I be responsible for other payments? Can I somehow protect my credit in this situation? Please advise.


Asked on 9/06/08, 1:01 pm

1 Answer from Attorneys
David Gibbs The Gibbs Law Firm, APC

Re: Credit related question

I'm sorry to hear of your situation. About the only way you will be able to salvage your credit is to make the payments on time until it is paid in full. A repo will not only adversely affect your credit, but it will also likely result in the lender seeking a deficiency from you (the difference between what they can sell the car for at wholesale auction and what you owe). They will probably not even recover the $8,000 you say its worth at auction, so you potentially have a very large exposure. Sadly, this is the reality of co-signing loans - I have yet to see one that turned out well for the co-signer. Unfortunately, it is an expensive lesson to learn.

*Due to the limitations of the LawGuru Forums, The Gibbs Law Firm, APC's (the "Firm") participation in responding to questions posted herein does not constitute legal advice, nor legal representation of the person or entity posting a question. No Attorney/Client relationship is or shall be construed to be created hereby. The information provided is general and requires that the poster obtain specific legal advice from an attorney. The poster shall not rely upon the information provided herein as legal advice nor as the basis for making any decisions of legal consequence.

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Answered on 9/08/08, 12:31 pm


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