i cosigned a vehicle loan that defaulted now i am being sued

i am a single unemployed father of a disabled 10 year old. what should i do. the party i cosigned for doesnt care what happens

Asked on July 6, 2009 under Bankruptcy Law, Arizona

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

If you cosigned, you are legally obligated on the loan. You should try contacting the lender and explaining the situation--lenders are not unreasonable, and they may let you pay over an extended period of time, pay a lesser amount, or at least reduce the interest that's accruing.

You might also, depending on your overall balance of debt to assets and income (including any disability or SSI payments for your son or unemployment compensation), consider declaring bankruptcy to wipe out any debts. If you have little or no income (and if the income you have is protected in a bankruptcy--in many states, disability payments and UI are) and few assets but many or large debts, bankruptcy can be a very viable alternative.

You can also sue the other party on the loan, though if (s)he doesn't have assets, you may not be able to collect from them; or the cost of the suit may outweigh any possible recovery.

You should try to get a consultation with a local bankruptcy attorney. You can use this site for referrals, or call your state Bar  Assocation. Many attorneys will provide a free initial consultation. You might also be eligible for free legal assistance--when you talk to your Bar Assocation, explain the situation and ask for referrals to any services or programs that provide free legal help for people who can't afford lawyers.

Also, if there are charitible or umbrella organizations for the condition(s) your son has, they may be able to refer you to attorneys who would help you for a reduced rate or free.


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