Legal Question in Civil Litigation in Pennsylvania

what leagal recourse do i have

i signed for a car loan in my name for a friend as a favor. the only agreement was a verbal agreement. she was to make all payments, maintain the care as if it was hers. the only thing we have in writing is what was sent to the bank for them to automaticaly debit her bank account. for the car payments aftre i found out she wasnt making the payments on time. once i found out she wasnt mainating the car properly i took the car back. she asked me if i would work w/hwr and give her time to get her affairs in order and purchase the car. i did so. in 12/99 she took the car back under the pretense of fixing the car and making the payments. she didnt and had the car repoed.w/out my kowledge. when i had an potential buyer for the car. now im being billed for close to $10,000.00 (the differance between what was owed and the auction amount) for a vehicle i never used. she has also forged my name on insurance forms, registration ect. what if any recourse do i have?


Asked on 4/04/00, 8:24 pm

1 Answer from Attorneys
William Marvin Cohen, Placitella & Roth, P.C.

Re: what leagal recourse do i have

"I signed for a car loan in my name for a friend as a favor"

Any attorney will tell you, if only we had a nickel for every time we heard this sad story. Mark Twain had a great line about how great and enduring true friendship is, to withstand all the storms and turns of life, till death, or the loan of money, whichever comes first.

You certainly have the recourse of suing your former friend for the money, and if the finance company sues you, you have the right to join her as a third-party defendant. Since you admit that you signed the loan, your obligation to pay the loan is not affected by her signing your name on registration or insurance papers.

I know you're learned this lesson the hard way, but for lurkers let me explain something: BANKS and FINANCE COMPANIES ARE IN THE BUSINESS OF COLLECTING MONEY. IF THEY WON'T LOAN SOMEONE MONEY WITHOUT A CO-SIGNOR, IT'S BECAUSE THEY HAVE REASON TO DOUBT THAT PERSON'S WILLINGNESS OR ABILITY TO PAY IT BACK. THAT'S A TIP-OFF RIGHT THERE. DON'T CO-SIGN OR GUARANTEE A LOAN UNLESS YOU'RE PREPARED TO MAKE IT GOOD. THE FORM YOU SIGN WHEN YOU CO-SIGN OR GUARANTEE A LOAN UNDOUBTEDLY SAYS THAT THE BANK HAS NO DUTY TO TRY TO COLLECT FROM THE BORROWER FIRST. THEY CAN GO AFTER YOU AS SOON AS SHE MISSES A PAYMENT. THEY DON'T CARE HOW WELL-INTENTIONED YOU ARE, OR HOW DEVIOUS THE BORROWER MAY HAVE BEEN. AND WHY SHOULD THEY?

To sum up, if you co-sign a loan, you should assume (1) that you'll end up paying it, and (2) your only recourse will be against the person who borrowed the money.

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Answered on 4/20/00, 11:36 am


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