I cosigned a loan for a trailer for my sister, she is now in default. What are my options? We live in the state of KY.

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I cosigned a loan for a trailer for my sister, she is now in default. What are my options? We live in the state of KY.

Is there anyway I can evict her and then catch the payments up myself and then use this as rental property.

Asked on June 9, 2009 under Business Law, Kentucky

Answers:

MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

You co-signed a loan -- you are now the surety -- so the bank/lender can come after you for the money, too.  You just basically may have effected your credit. Your options are to pay the loan and arrange some sort of loan with your sister to have her pay you back, ask the lender to place you on the loan only (minimal chance), ask for a modification of the loan (your sister needs to do this), perhaps a deed in lieu (let go of the title), etc.

The deed in lieu will impact your credit. 

At this point, you need to consider your options.  Try contact the Kentucky Dept of Financial Institutions and see if any communication can be started with you, your sister and the lender. http://www.kfi.ky.gov/

Has your sister been contemplating bankruptcy? If so, would this be part of the bankruptcy? Again, consider the implications it will/could have on you.


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