Legal Question in Credit and Debt Law in Massachusetts

Co-Signor ''Settlement'' on Payment of a Loan

My son co-signed for his cousin on a Motorcycle -- his cousin is in default, but the collection agency says they do not reposess -- that they only will accept a ''payoff'' on the loan. The payoff is $6,333 -- my son could not get financing, since his cousin has now ruined his credit. We (his parents) have elected to pay a ''settlement'' figure of $5,400, for our son. The collection agency is now saying that paying a ''settlement'' amount will have a MORE ADVERSE effect on his credit, then if he pays the total amount in full. I don't know if this is true; pls advise, and pls get back to me asap. Thx!


Asked on 9/03/08, 12:12 pm

2 Answers from Attorneys
JOHN TATOIAN LAW OFFICE OF JOHN A. TATOIAN ESQ.*Licensed Only in Massachusetts

Re: Co-Signor ''Settlement'' on Payment of a Loan

The answer to your question depends upon if you are more worried about how creditors will interpret your credit rating or the consequences in not paying off the loan.;)

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Answered on 9/06/08, 12:17 am
henry lebensbaum Law Offices of Henry Lebensbaum (978-749-3606)

: Co-Signor ''Settlement'' on Payment of a Loan

It depends on what is reported. It is likely that there may be an entry. You can ask your son to get a credit report and check it out before you do anything.

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Answered on 9/03/08, 6:26 pm


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