What is options/ramifications for someone who co-signed a car loan with someone and this person wrecked the car?

UPDATED: Jul 14, 2010

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What is options/ramifications for someone who co-signed a car loan with someone and this person wrecked the car?

I have a friend that co-signed on a loan in the past with an ex when she was younger. Currently, They have a child together. They have had a mutual verbal agreement – post relationship – since he was keeping the car that he would pay for the monthly bill. Since then he has been late on his bills multiple times, which has hurt her credit, and just recently wrecked the car while drunk driving, but eluded a DUI/report by just having the car towed (possibly by someone he knows). Apparently this man has no insurance. Should she sue? Next steps?

Asked on July 14, 2010 under Accident Law, Missouri


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

Answered 12 years ago | Contributor

This is going to be a very expensive lesson for your friend to learn. The DUI is troubling but since there is no real proof as he was not formally charged it is irrelevant to the situation. 

As a co-signor on a loan she agreed to be legally obligated to repay the loan should the primary signor defaults.  So without insurance to cover the loss she and her ex have to continue to pay off the car loan.  Can she sue?  She can try as a co-signor and try and prove that she has a verbal contract with him, as long as it does not violate the Statute of Frauds in your state (which says that certain agreements have to be inwriting to be valid).  She needs to get legal help here.  Good luck. 

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