In 2006 I cosigned for a car loan for a close friend and made the stipulation that they must pay on that car. They didn't and the car was re...

Question

In 2006 I cosigned for a car loan for a close friend and made the stipulation that they must pay on that car. They didn't and the car was repossessed, They have not made any arrangements to pay the car off or made any arrangements at all. The car is on my credit and I am in the process of trying to have it cleaned up. I have made several attempts to contact this person but he has made no effort. what legal recourse do I have?

Answer

Your stipulation in co-signing meant nothing. Never do this (co-sign). It always turns out badly. When you co-sign, its a red flag that the person who is buying the car either has no credit or, more likely, bad credit. The worst thing you can do in the latter case is co-sign because, as you found out, this is reported on your credit and if they pay late or don't pay, that affects your credit.

By co-sgining you also made a promise to the lender that if the person did not pay, then you would pay. So now you must pay and you have no car.

I don't know what you mean by having your credit "cleaned." If this is a legitimate debt, then the debt will stay on your report for 7 years. I don't know when the repo occurred or if you were sued on any deficiency. If you are over the 7 year mark, then the item can be removed. If you are under the 7 years, then the only way to get this debt off your report is: (1) pay in full and see if the creditor will take it off your report; (2) pay less than what is owed - the creditor and you will have to agree on the exact amount. It will still be on your report for awhile, but at least the debt will show up as paid - settled for less than full value and things will get better for you over time; or (3) file bankruptcy.

I don't know what else you mean by legal recourse. If you mean against your close friend, then you will first have to pay for the car, either in full or by way of settlement. Then you can sue your now former friend to recover the amount that you paid. You possibly can get damages for ruining your credit, but that is measured by the difference in interest rate that ou would have received were this not on there minus the interest rate you are now stuck with because of the dents on your credit. So you actually have to apply for and get credit in order to recover.

However, why did your friend stop paying? It was a slimy thing to do and I'm not making an excuse for your friend. But unless your friend has assets, a judgment will not do much good. There is no wage garnishment in North Carolina for most debts of this kind. And your friend could file bankruptcy on you and leave you with nothing anyway. So carefully consider what you are likely to get if you sued your friend and decide whether the costs of suing (you cannot recover attorney fees) is worth throwing more good money after bad.