Legal Question in Administrative Law in Pennsylvania
Signing as a Co-signer
I co-signed for a car for my daughter, who did not make prompt payments. She fell behind 6 months, The company was good to her and cut her all the breaks she needed. I was concerned about my credit, needed to get my name off the title, car gone or whatever she needed to do. I had them repossess the car,there was no other way out. She was not going to pull my name off, or sell the car or even give it to me so NOW, why are they pursuing me for money? It was pretty obvious that I was not going to make payments or even want the car, I think I missed the class on what having a car repossessed really meant. Not sure what this is going to do to me and how to handle it. Could you enlighten me. My daughter stopped speaking to me or seeing me during the time this was happening because I told her she needed to make good on the payments so to not ruin my credit.
1 Answer from Attorneys
Re: Signing as a Co-signer
When someone co-signs a loan of any kind that debt is their debt. They are guaranteeing the debt of the person for whom they are co-signing. Obviously, your daughter is a bad debt risk. The lender knew that and therefore required a co-signor because here credit reflected that she wasn't going to be responsible for the debt.
When she stopped paying you were still responsible for the debt. When the car was repossessed, the lender got as much as they could to cover the debt by liquidating the asset. Most likely it was sold at auction for about 50% of its retail value, and that's only if the car wasn't abused (in perfect condition). The difference between the balance of the loan and the amount the lender got from auctioning the car is known as the deficiency. This amount remains outstanding on the debt and will follow you and your daughter until the debt is paid or you both go bankrupt.
Either you or your daughter must pay the debt. Now that there is no more security the dunning from the collection agencies will only becaome more aggressive.
Lesson learned, don't co-sign unless you are prepared to assume the loan.
Regards,
Roger Traversa
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