What can i do if my daughter isn’t making her car payments and I can’t afford to?

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What can i do if my daughter isn’t making her car payments and I can’t afford to?

2 years ago my daughter and I purchased a vehicle; I thought I was co-signing for the loan. Since then I have discovered that I am the borrower and she is just a tag along on the title. She is no longer making the payments and has cut all communication with me. I can’t afford to keep making the payments for her but don’t want to ruin my credit either. Do I have any options available to me?

Asked on September 22, 2010 under General Practice, Wisconsin

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Unfortunately, there is probably no legal recourse--i.e., nothing you have a right to do. If you were the borrower, you are obligated under the loan, and you cannot get out from under it--other than by paying it--except by (1) declaring bankruptcy, which is probably excessive in this case (and would impact your credit anyway) or (2) by working something out with the lender. That's what I mean by no "legal" options--you only real option may be to try to negotiate with the lender. for example, maybe they'd take back the vehicle, with or without some additional modest payment, in exchange for marking the loan as paid. You could also try to renegotiate payment terms, stretching payment out more (so less per month) if you want to keep the car, or use a home equity loan to pay off the car loan (at least home equity interest is tax deductible).


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