Legal Question in Credit and Debt Law in Maryland
Refinancing a car
My sister and I are the joint loan holders on a car, she's the primary signee, I'm the secondary. The bank contract lists each of us as a co-owner. We've had this car since August of '03, and she is now behind in her car payments, and the bank is asking me for money. Last time I spoke to her, she wanted me to refinance the vehicle in my name only in order to take her name off of the loan. Although she says that she'll give me the car, I don't think she will. I know she's not going to make the payments on it, so I don't want to take the chance of putting my name on a refinanced loan and then have her not make payments. My credit alone is not strong enough to refinance the car on my own. Since she is not making payments and the bank is asking me for the money, can I have the car repossessed? If I can, and that happens, what will happen then in regards to my credit?
2 Answers from Attorneys
Re: Refinancing a car
You can repossess the car if you are joint TITLE holders - your question only indicates that you are jointly reponsible on the loan. If you are on the title, you can repossess it. If you do, and you turn the vehicle in, then you will be responsible for any deficiency due on the loan when the lender auctions the car. Unfortunately, as a co-signer (or co-borrower, I am not sure which you are) then every late payment, and the voluntary repossesion, reflects poorly on your credit.
If you have any more questions, feel free to give me a call.
Re: Refinancing a car
Being that payments are late it is unlikely that the bank will agree to release either party responsible for payment. The bank will look to any and all parties for collection.
You would have to obtain a loan on your own to take over the vehicle completely. Your question indicates that you are unable to do this.
You indicate that you are a co-borrower on the loan rather than a co-signer. If you take the automobile in your name only then the Department of Motor Vehicles or MVA title may need to be amended to omit the other borrower.
You should contact an attorney. Call me for assistance.
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