Legal Question in Credit and Debt Law in Michigan

Re: Does the co-signer always has to pay if borrower defaults

Time and time again I warn people against co-signing for anything. They are liable for 100% in the event of a default, it shows up as a load on your credit and you typically are unable to enjoy the collateral. That said, you're in trouble and you need to act fast. First, return the car immediately. Take note of all the damage to the vehicle with photographic evidence. Make note of the mileage and any other issues with the vehicle. The sooner you get it back to the dealer, the sooner they can sell it and the less it will have depreciated. Ask them if they can waive your liability. It's worth a shot. If not they will try to sell it and you'll get a bill for the difference between what it was sold for and what you owe. If it is significant, take note of the way they sold it, the method of notice and the time they held onto the vehicle- all of these factors can weigh in on whether THEY caused it to be sold at a loss, sticking them with the deficiency balance in the event of a court hearing. Should this all check out, contact an attorney anyway, especially if the bill is high and he can comb through the sale for defects. Considering that the sale is good you can pay it or - (gulp) file for bankruptcy, discharging it entirely. Then again, maybe you can track down your friend. Should there be a deficiency judgment, it might be worth to sue your friend when they come back. If they have any stateside assets, you can grab those too.