What to do if co-signed a loan for a friend and now they are not making payments?
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What to do if co-signed a loan for a friend and now they are not making payments?
I tried to help out a “friend” about 3 years ago by signing for a vehicle for her because she was in dire staits. There was a verbal agreement, which was later confirmed by her in emails and texts which I have kept. She has since incurred a large amount of tickets on the vehicle, accidents, and has only paid $120 in payments. Currently the vehicle in question is in a shop with engine issues. Her business associate made promises to take over responsibility, which I have emails and texts to prove however now she is claiming she has been out of work for a period of tim, and her partner says his financial status has changed, so he is not willing to honor the solution that he gave to me of taking responsibility. My financial situation itself has been a challenge but I have had to find a way to pay for her vehicle payments, tickets, insurance, etc., in order to keep my credit from being affected. Please let me know my best course of action to take. Court has always been the last option, yet I have tried everything else.
Asked on August 31, 2012 under Bankruptcy Law, Virginia
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
I would first have a face to face meeting with your "friend" and the business associate to see what is the best course of action of resolving the problem that you have written about as well as solving the unfortunate situation that you are in financially by being a co-signer for a loan on the payments for the vehicle that you have written about to see if you three can reach a common solution.
One suggestion is for the "friend" and the business associate to sign a promissory note drafted by a business attorney for the amount that you have incurred out of pocket to date for repayment on a monthly basis with stated interest. Likewise a contract between you three should also be drafted and signed by all setting forth a means to get the car repaired, loan paid off, tickets paid off, and you paid off.
If the above cannot be accomplished, then you need to consider a legal action against the "friend".
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