What to do if f I received a collection letter for a repossessed auto that I never personally owned?
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What to do if f I received a collection letter for a repossessed auto that I never personally owned?
I was, however, the buyer on the lease for the co-signer. I have my own auto which I have paid on time and still paying. I was also in a consolidation program to pay my credit cards, which I just recently finished. I am a single parent,and have so far proven that I take responsibility for my own debts. Ye, in this case of the auto, I would like to dispute and avoid paying since I never actually owned it; I just did the favor to the co-signer. If you can please provide me with some helpful advice I will truly be grateful.
Asked on May 8, 2012 under Bankruptcy Law, California
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
Unfortunately, it does not matter that you never owned or possessed the car personally--if you were a signor or co-signor on the lease or financing for the car, you are liable for it. The law does not care who actually made use of or drove the car; it only cares about who agreed to be financially responsible of liable for it, which you did. The lender or its collections agency can come after you for the money, and if you don't pay, can sue you; your credit will also be damaged.
However, if there was another signatory--and especially if that person was the one who actually received the use and benefit of the car--you should be able to sue him or her to recover money. You would sue for breach of contract (violation of the lease or financing agreement, which obligated the co-signor as well as you to pay; also, violation of any agreement between the two of you as to who would pay), and also potentially unjust enrichment (they got the benefit of the car without paying) and/or promissory estoppel (if you only signed becaue of their promise to pay, that sometimes is enough to make the promise enforceable even in the absence of an actual agreement between the two of you). Therefore, you may be entitled to compensation and should consult with an attorney to explore your options in greater detail.
In the future, do NOT cosign loans, leases, or financing of any kind for anyone, except possibly for college for your children--you assume as much risk as if you were taking out the loan, etc. yourself.
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