Legal Question in Credit and Debt Law in Pennsylvania

Re: Secured debt after death

If the vehicle was totaled then even though he defaulted on the loan, there was undoubtedly collision coverage on the vehicle because the lender would want to protect its collateral. That is who the lender should look to first. As for the loan for the new vehicle, if he makes the payments on that her passing should have no effect.

But from the wording of your question it seems to me that you are assuming the worst and that you believe he defaulted on the co-signed loan before the accident and that you assume that he will default on the new car loan as well. If that is the case, then there may be a deficiency on the first loan for which your Mother is secondarily liable and a repossession of the new vehicle and a deficiency judgment against your Mother on the new loan which could result in a claim against your Mother's estate if she were to pass away.

I wouldn't be so quick to suspect the worst, though. Remember that she is your nephew's Grandmother and your nephew and your Mother may be handling this their own way for any number of reasons, for example your Mother may need your nephew to drive her back and forth from the doctor's office or grocery shopping, etc. and she needs your nephew to have a car.