Legal Question in Credit and Debt Law in Rhode Island

Loan-Cosigned Responsibilities

In 2000 I co-signed an auto loan for my then 18 year old daughter. At the time she was employed as a certified nursing assistant, making enough money to pay the monthly installments on the car loan with Ford Credit. I knew she would be able to handle the payments. A few months after getting the car, my daughter lost her job and had to take a much lower paying position. Needless to say, she didn't make the payments and the 1996 Ford Taurus was repossessed. Now they credit company is coming after me. My question is: since the loan was primarily in my daughter's name, and she is currently employed at a lower paying job, shouldn't the plaintiff be trying to get my daughter to pay this debt, instead of me? Any information would be greatly appreciated.


Asked on 7/06/02, 8:46 am

1 Answer from Attorneys
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Re: Loan-Cosigned Responsibilities

The lender will chase anyone it feels has the ability to pay; there generally is not a provision requiring the lender to first chase the primary obligor, though you would have to review the loan agreement to be certain. In other words, when one "co-signs" for another, the co-signer is actually like a second borrower - the lender may chase you for payment AND chase your daughter at the same time, or just pursue one or the other if it so chooses. This is called joint and several liability. Your best bet would be to try and negotiate a settlement with the lender to accept payments over time. Or you may retain a lawyer to do so on your behalf. The lawyer will likely carefully review the procedures followed by lender in selling the repossessed car, to ensure the sale was conducted reasonably (i.e. make sure Ford didn't sell the car to an employee for less than it could have gotton at a real auction).

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Answered on 7/06/02, 9:10 am


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