Legal Question in Credit and Debt Law in Missouri
auto loan co-signer conflict
Several years ago, my husband purchased a used pick-up. His father co-signed on the loan. Six months before the truck was paid off, his father moved. He offered to finish the payments as long as he could have the truck. He is currently in possession of the pick-up, and is now threatening to file a civil suit for reimbursement of those payments. Since he has full possession of the truck, was the co-signer, and is listed on the title as co-owner, do we have any legal obligation to repay this debt?
1 Answer from Attorneys
Re: auto loan co-signer conflict
Theoretically, your father-in-law could pursue you for the amount of the payments he made, but if he did, he would need to surrender possession of the truck. Look at it this way. He can't have it both ways. If he gets the truck by virtue of finishing the payments, then what you've done is you've given up your right, title and interest in the truck as vested by the initial payments. I assume that your husband paid some portion of the payments.
So, if your FIL wants the truck, he can pay you the amount you already paid,and keep the truck, or he can surrender the truck to you and demand payment of the outstanding amount, but not both.
Does that make sense?
By the way, this is the reason that whenever you get a co-signer, you should have an agreement between you as to what happens in the event of a default. Lots of people pursue the co-signer because the co-signer has money. In order to protect their credit, the co-signor will pay the amount. If you have an agreement between the two you before there is a breakdown, you can jointly decide how to handle any problems in the payments.
Just some good advice for next time.
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