Legal Question in Credit and Debt Law in Maine
Rights as a cosigner of an automotive loan?
Some time ago, my wife co-signed on an auto loan for a neighbor on the promise that it would be promptly paid. It has been more than a year and the applicant has not attempted to refinance the loan or try to find a different co-signer. She is now planning to move out of state. According to the bank, she has not paid on the loan. Does my wife have any rights to the car or take the applicant to court.
Any help would be appreciated.
Thank you,
Rick
1 Answer from Attorneys
Re: Rights as a cosigner of an automotive loan?
If your wife has made any payments on the vehicle, then she could, in theory, sue the neighbor who still has the car for unjust enrichment, breach of contract and indemnification of the debt. However, your wife could also theoretically sue for possession of the car in a personal property Forcible entry and Detainer action. She would need to show why she is entitled to possession by virtue of payments on the car, etc. It don't know if she is jointly on the title with the neighbor, or how much the neighbor has already paid on the vehicle? these factors would need to be considered and your wife may not be entitled to possession. In any event, she may be entitled to either be paid back from the neighbor, or possession of the car, but not both.
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