Legal Question in Credit and Debt Law in New York

Re: Responsibility of co-signer for a loan

After the car is sold then both the original debtor AND co-debtor are liable for any amount owed beyond the money the creditor received at the sale. For example, if you owed $10,000 on the car loan and the car was sold for $8000 at auction, you still owe $2000 to the creditor. The creditor would have to bring suit to sieze a bank account or garnish wages. You would get notice and have a court date. The new debt however is unsecued and could be discharged in bankruptcy which may be a good option for you. Call my office at (212) 745-1373 for a free consultation.

Re: Responsibility of co-signer for a loan

The co-signer of a loan is as liable for any money shortfall from the sale of the car as is the primary borrower. The co-signer must be served process (sued) just as the borrower would have to be before any bank accounts could be attached (frozen).

Re: Responsibility of co-signer for a loan

You might get notice of the repo...for a judgment though, you will need to be served. Be certain to answer any legal papers to avoid a default. Only after a judgment can your account be "frozen"

It is no defense, however, that you are a co-signor.

Good Luck

RRG