Is a co-applicant on a repossession held responsible for the delinquency balance?

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Is a co-applicant on a repossession held responsible for the delinquency balance?

If so what is worse on a credit report “charge off” or a “settlement”? I was a co-applicant for a motorcycle loan my boyfriend took out when we were living together. We broke up, he moved out and took possession of the vehicle. During this time he stopped making payments and the bike was repossessed. I was never notified by the ex-boyfriend or the lender. There is now a delinquency balance, since it was auctioned for less than the loan. He refuses to make any payment and I would like to clear this up from my credit. It is currently a charge off, I’ve spoken to the lender and they offered a settlement of 50% off of balance. Is this my best option?

Asked on August 24, 2010 under Bankruptcy Law, Massachusetts

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Settlement is better than charge off.  A charge off is a derogatory statement and a bad mark on your credit.   And charge off doesn't meant that you are not still responsible for the debt  You indeed are.  After 7 years the words are removed from your credit report.  If they are negotiating a settlement amount with you then make sure that in the stipulation you have them remove the term :charge off" in any way: charge off settled or charge off paid.  Just have them report it as "settled" or "paid."  And then don't forget to go after that ex-boyfriend of yours for the money; at least half of it anyway.  Good luck. 


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