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pwyang117

Auto Loan Discharged - HELP NEEDED

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Posted (edited)

Hello Everyone, 

 

So I'm in a bind and honestly do not know what to do and feel like I've exhausted all options. I'm hoping I can get some advice on what to do. Long story short, I co-signed a vehicle loan for my parents, out of the goodness of my heart which I now regret with every atom in my body and being young, dumb, and naive at the time. Fast forward 2 years later, they filed for Chapter 7 bankruptcy without my knowledge or consent and the loan was written as a charged off. The vehicle is still in their possession but they don't have the title since it's still being held onto by the bank. My credit score prior to their filing was in the high 770s with no bad mark whatsoever and everything paid on time and responsibly. The 'Charged Off' is now listed on my credit score and keeps showing up as 'Payment Late' month after month even though their bankruptcy was processed and closed back in January. I assume that since their bankruptcy has been settled, no further payment would be made unless they wanted the title, obviously not the case. I've tried calling and speaking with the bank who gave the loan to see if a deal could be worked out where if the balance was paid off in full, would they remove the remark or do something. They refused. I've tried getting in contact with the lawyer who assisted my parents with the bankruptcy filling to get more information since it involved me and have failed numerous attempts to contact him, either busy, with a client, or no pick-up. I've tried using Credit Repair companies like SkyBlue and they advised not to do anything, sending cease and desist letter in fear of me getting used for the debt. What frustrates me the most is how my parents don't care what they've done to me and are fine with how things turned out, them relieving themselves of their debt and not paying on their vehicle, while I suffer the consequences of their actions. I've tried to reason or plea my case but it's not like they can do anything right now or they just shrug it off. Please give me some options on how to proceed or if waiting 7 years for the mark to fall off is the only solution. Thank you. 

Edited by pwyang117

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welcome to CB!

 

unfortunately as a co-signer you are just as liable for the debt as they are (were). the fact you used a CRO may have done more damage than good.

 

have you been communicating in writing with the owner of the debt?

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Do you have the documents you signed?? On a car loan there are TWO areas that you would have to sign in order to be held responsible for a repossession or judgment on a repo deficiency. The main one on the front is where you signed as co-signer on the loan, the 2nd is on the back where you would have had to also sign to be liable for a deficiency. 

 

If the car has not been repossessed and the OC lender has made NO effort to do so then you have a chance to get it off your reports and avoid paying anyone anything. ( I assume the delinquency is being reported by the OC)

Follow the guides;

https://whychat.me/GUIDEBOOK.html

 

https://whychat.me/repoltr.html

 

Send the initial dispute letter to the CRAs and see what happens

https://whychat.me/initdispltrsol.html

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Unfortunately, you are 100% responsible for the debt.  If your parents are not paying, the lender will look to you.  If payments are not current you can suffer the consequences as it relates to your credit report.  Such is the risk anyone who "co-signs" takes.

 

As to your comment that your folks filed bk without your "consent", please understand that your permission is not required.  They had the right to file and did not need anyone's "consent".

 

Des.

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3 hours ago, despritfreya said:

Unfortunately, you are 100% responsible for the debt.  If your parents are not paying, the lender will look to you.  If payments are not current you can suffer the consequences as it relates to your credit report.  Such is the risk anyone who "co-signs" takes.

 

As to your comment that your folks filed bk without your "consent", please understand that your permission is not required.  They had the right to file and did not need anyone's "consent".

 

Des.

Ordinarily you would be correct, however in this case I believe the only recourse the lender would have had against the OP co-signer would have been if the car had been repossessed and a deficiency was claimed and the co-signer had also signed responsibility for any deficiency. A debt is invalid if there is no legal way for the lender to enforce their claim. The car was never taken back by the lender although it was and is their right to do so. The parents still have the car and presumably are still driving it and registering it even though they have no title and can't sell it. The OP can dispute this off his reports because there is NO LEGAL DEBT

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Posted (edited)
13 hours ago, Why Chat said:

. . . in this case I believe the only recourse the lender would have had against the OP co-signer would have been if the car had been repossessed and a deficiency was claimed and the co-signer had also signed responsibility for any deficiency. . . .  The parents still have the car and presumably are still driving it and registering it even though they have no title and can't sell it. The OP can dispute this off his reports because there is NO LEGAL DEBT

Many consumers have the above misconception.  Many consumers "believe" that a "co-signer" is not the primary obligor.  This belief is wrong.  A "cosigner" is just as responsible for the obligation under the contract as the first party who signs on the dotted line.  A cosigner may be called to step up to the plate if and when the primary borrower fails to pay and this has NOTHING to do with the repossession of collateral.  A cosigner, unlike one signing a personal guarantee, IS the borrower.

 

https://www.investopedia.com/articles/personal-finance/082115/what-are-cosigners-liable-responsible.asp

 

https://www.experian.com/blogs/ask-experian/cosigners-are-responsible-for-debt-repayment/

 

https://www.bankrate.com/loans/personal-loans/loan-co-signer-what-are-my-rights/

 

https://www.nolo.com/legal-encyclopedia/cosigner-liable-debt-file-bankruptcy.html

 

https://www.creditkarma.com/advice/i/cosigning-loan-pros-cons/

 

and so on and so on. . .

 

Edt to add -  And that "show me the note" type defense is bogus and, if a lawsuit is filed, will simply lead to additional attorneys fees being added to the judgment thus making it more likely that the co-signer will end up in bankruptcy.

 

Des.

Edited by despritfreya
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Were you properly included in the creditor matrix at the time of the filing or did you learn of the BK ONLY after it had been filed and finalized? 

 

A co-borrower who is NOT filing BK has some of the same rights as does a regular creditor.  I went through this with an ex who filed after we had separated.  We were joint on two different vehicle loans, one of which I kept post-separation and the other was one they had kept.  They later flipped that vehicle (never mind the fraudulent actions by the dealership to forge my signature on the title).  I learned of the filing only by coming out one morning to find the vehicle was not in the driveway, being informed later that morning that the truck was not stolen but, in fact, was repossessed.  

 

I ultimately was able to get the BK notations off of the report along with all negative reporting related to the account AND kept the vehicle AND actually would see the bank cancel out roughly a grand from the small remaining balance.  Although sanctions were proposed against the attorney, none were actually taken since it turned out they were not even a member of the Texas Bar and had been under suspension in another State. 

 

The error in this case was not on the part of the bank but they agreed that errors had occurred and that I should not have been penalized through the adverse reporting.

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I agree with "despritfreya" in general, however this is NOT a case of anyone suing the OP co-signer or even attempting to collect from them. It is a SIMPLE case of REPORTING on his credit reports. If he disputes and the CRAs can not verify HIS (the co-signer's) liability then the account will be deleted. The ONLY concern he MIGHT have had would have been IF the car had been repossessed and a deficiency THAT HE HAD ACCEPTED LIABILITY FOR was demanded. The parent's BK nullified THEIR liability under the original loan that he had co-signed for. HE( the co-signer) can't be sued for the balance due as the OC has made no prior attempt to assert their legal right of repossession.

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40 minutes ago, Why Chat said:

HE( the co-signer) can't be sued for the balance due as the OC has made no prior attempt to assert their legal right of repossession.

We will agree to disagree but I do make a very good living dealing with such issues - even when the collateral has not been seized by the secured lender.

 

Des.

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Posted (edited)
On 7/4/2019 at 12:48 PM, hegemony said:

welcome to CB!

 

unfortunately as a co-signer you are just as liable for the debt as they are (were). the fact you used a CRO may have done more damage than good.

 

have you been communicating in writing with the owner of the debt?

I am  aware that I am just as liable for their debt. My question is, how do I move forward given the above information. I tried to use them but they ended up "declining" to assist me. So nothing really ended up happening. Good to know though. Communicate more or less word of mouth though I mean, they're my parents so words get thrown back and forth. 

Edited by pwyang117

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Posted (edited)
23 hours ago, Why Chat said:

Do you have the documents you signed?? On a car loan there are TWO areas that you would have to sign in order to be held responsible for a repossession or judgment on a repo deficiency. The main one on the front is where you signed as co-signer on the loan, the 2nd is on the back where you would have had to also sign to be liable for a deficiency. 

 

If the car has not been repossessed and the OC lender has made NO effort to do so then you have a chance to get it off your reports and avoid paying anyone anything. ( I assume the delinquency is being reported by the OC)

Follow the guides;

https://whychat.me/GUIDEBOOK.html

 

https://whychat.me/repoltr.html

 

Send the initial dispute letter to the CRAs and see what happens

https://whychat.me/initdispltrsol.html

Thanks for the tip! Honestly, it's been over 2 years since I've signed my life (credit) away so I can't quite remember. I do know for a fact that the car has not been repossessed yet and they are not obligated to continue to pay into the vehicle unless they want the title, is my understanding. Again, not a lawyer or expert on bankruptcy filings so I'm just going off the information given to me. I will check out what you posted. Thanks. 

Edited by pwyang117

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Posted (edited)
22 hours ago, despritfreya said:

Unfortunately, you are 100% responsible for the debt.  If your parents are not paying, the lender will look to you.  If payments are not current you can suffer the consequences as it relates to your credit report.  Such is the risk anyone who "co-signs" takes.

 

As to your comment that your folks filed bk without your "consent", please understand that your permission is not required.  They had the right to file and did not need anyone's "consent".

 

Des.

Oh I am quite aware my consent is not needed nor do I have to know that a bankruptcy filling has been made. I am saying what FRUSTRATES or PISSES me off is that simple fact. That's all. Now, with all that being said, HOW or WHAT can I do to move forward. Or is waiting out the 7 years (no sweat, not like I don't need my credit for anything) my only option? We can sit here all day and debate whether I'm liable or not liable or go back forth on something that's already settled and stated, but I'm just here to seek solution on how to move forward. 

Edited by pwyang117

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19 hours ago, IndyPoolPlayer said:

I'll leave this here for someone who finds this on the googler....

 

NEVER COSIGN A LOAN WITH ANYONE!!!

 

 

ESPECIALLY RELATIVES!!!

Oh hey, thanks for the obvious/already occurred event tip. Definitely wasted 5 seconds of my life I'll never get back reading your comment. Yes, please do follow your own advice and do not joint credit/cosign with your wife (or husband) and your kids. God forbid something happen to you either. 

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5 hours ago, despritfreya said:

Many consumers have the above misconception.  Many consumers "believe" that a "co-signer" is not the primary obligor.  This belief is wrong.  A "cosigner" is just as responsible for the obligation under the contract as the first party who signs on the dotted line.  A cosigner may be called to step up to the plate if and when the primary borrower fails to pay and this has NOTHING to do with the repossession of collateral.  A cosigner, unlike one signing a personal guarantee, IS the borrower.

 

https://www.investopedia.com/articles/personal-finance/082115/what-are-cosigners-liable-responsible.asp

 

https://www.experian.com/blogs/ask-experian/cosigners-are-responsible-for-debt-repayment/

 

https://www.bankrate.com/loans/personal-loans/loan-co-signer-what-are-my-rights/

 

https://www.nolo.com/legal-encyclopedia/cosigner-liable-debt-file-bankruptcy.html

 

https://www.creditkarma.com/advice/i/cosigning-loan-pros-cons/

 

and so on and so on. . .

 

Edt to add -  And that "show me the note" type defense is bogus and, if a lawsuit is filed, will simply lead to additional attorneys fees being added to the judgment thus making it more likely that the co-signer will end up in bankruptcy.

 

Des.

Oh, I quite understand that a cosigner is liable if the primary isn't able to. That part I know, so to constantly repeat it over and over in the comment gets quite repetitive. My thing is, I haven't been called up to "step up to the plate." The bankruptcy filing ended back around January and it has been 6 months since and I have not heard back from creditors "ringing" on my door bell, figuratively speaking, demanding payment. Unless there is a grace period that I am not aware of before all hell lets loose. Yalls feel me? 

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4 hours ago, centex said:

Were you properly included in the creditor matrix at the time of the filing or did you learn of the BK ONLY after it had been filed and finalized? 

 

A co-borrower who is NOT filing BK has some of the same rights as does a regular creditor.  I went through this with an ex who filed after we had separated.  We were joint on two different vehicle loans, one of which I kept post-separation and the other was one they had kept.  They later flipped that vehicle (never mind the fraudulent actions by the dealership to forge my signature on the title).  I learned of the filing only by coming out one morning to find the vehicle was not in the driveway, being informed later that morning that the truck was not stolen but, in fact, was repossessed.  

 

I ultimately was able to get the BK notations off of the report along with all negative reporting related to the account AND kept the vehicle AND actually would see the bank cancel out roughly a grand from the small remaining balance.  Although sanctions were proposed against the attorney, none were actually taken since it turned out they were not even a member of the Texas Bar and had been under suspension in another State. 

 

The error in this case was not on the part of the bank but they agreed that errors had occurred and that I should not have been penalized through the adverse reporting.

I only learned of the BK only after it has been filed and finalized or at least in the its very late stages. Glad things worked out for you, sounds like you went through lots of crap. 

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4 hours ago, Why Chat said:

I agree with "despritfreya" in general, however this is NOT a case of anyone suing the OP co-signer or even attempting to collect from them. It is a SIMPLE case of REPORTING on his credit reports. If he disputes and the CRAs can not verify HIS (the co-signer's) liability then the account will be deleted. The ONLY concern he MIGHT have had would have been IF the car had been repossessed and a deficiency THAT HE HAD ACCEPTED LIABILITY FOR was demanded. The parent's BK nullified THEIR liability under the original loan that he had co-signed for. HE( the co-signer) can't be sued for the balance due as the OC has made no prior attempt to assert their legal right of repossession.

THANK YOU. God bless you and America. 

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you need to separate the frustration with your parents and your legal position. do what is in your best interest since nobody else will do it for you.

 

on your 4 major consumer credit reports, what is the DOFD on this tradeline?

 

what is the SOL for this type of debt in your state?

 

you will find it hard to negotiate a pay for delete (PFD) and you're main concern should be whether the creditor tries to come after you for the balance. paying it in full may avoid this but will not remove it from the CRAs. I'd worry less right now about how it reports and your scores and more on making sure you are not going to be pursued. since two of the three of the debtors for this loan filed BK, the creditor might simply not want to deal with any of the three owners of the debt which will complicate you paying off the debt.

 

I'll ask again, have you been communicating in writing with the owner of the debt?

 

who has the car? what is it worth?

 

 

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4 hours ago, pwyang117 said:

Oh hey, thanks for the obvious/already occurred event tip. Definitely wasted 5 seconds of my life I'll never get back reading your comment. Yes, please do follow your own advice and do not joint credit/cosign with your wife (or husband) and your kids. God forbid something happen to you either. 

Listen here - this board is littered with people like you who tried to help out others by cosigning for loans (which is the same as signing for a loan yourself only you don't own the collateral) then whined when they get burned by the borrower when the borrower either doesn't pay, lets the collateral get repossessed or declared BK. They either end up paying for something they never owned, or their credit reports are thrashed, or both. So cut the g-d d@mn attitude.

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The poster's parents have the car.  See the first post.

 

If your parents filed for bankruptcy in January and the car hasn't been repo'd in July, it's likely it will never repo'd.  They won't be able to legally sell it or donate it.

 

You could wait out the SOL and then use that as a defense if you're sued.  And of course after 7.5 years, it will disappear from your credit reports. 

 

The SOL doesn't mean you can't be sued.  Anyone can sue anyone for anything.  You could end up dealing with this for a long time.

 

Since they haven't repo'd it, maybe you could settle with them. 

 

Have you talked to your parents about this?  They could certainly make payments if they wanted to.

 

I'm sorry this happened.  Parents should not do this to their children.  Parents should protect children not cause them financial harm. 

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26 minutes ago, IndyPoolPlayer said:

Listen here - this board is littered with people like you who tried to help out others by cosigning for loans (which is the same as signing for a loan yourself only you don't own the collateral) then whined when they get burned by the borrower when the borrower either doesn't pay, lets the collateral get repossessed or declared BK. They either end up paying for something they never owned, or their credit reports are thrashed, or both. So cut the g-d d@mn attitude.

Let's not vilify the poster who was screwed over by their parents.  We all have families, and we all know the dynamics involved in those relationships. 

 

The poster has the right to be angry.  They're looking for help. 

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Just a quick question.  Did both your parents sign the loan documents?  Is your name on the registration? I'm trying to figure out how you would have co signed if they both signed joint on the app and RISA.

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2 hours ago, IndyPoolPlayer said:

Listen here - this board is littered with people like you who tried to help out others by cosigning for loans (which is the same as signing for a loan yourself only you don't own the collateral) then whined when they get burned by the borrower when the borrower either doesn't pay, lets the collateral get repossessed or declared BK. They either end up paying for something they never owned, or their credit reports are thrashed, or both. So cut the g-d d@mn attitude.

Cut the attitude? I was just pointing out the obvious with how "helpful" and pointless your comment was. That's all. No need to go full keyboard warrior and get your butt hole tickled. Sheeeesh. Get's called out and "whines" about it. 

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23 minutes ago, pwyang117 said:

Cut the attitude? I was just pointing out the obvious with how "helpful" and pointless your comment was. That's all. No need to go full keyboard warrior and get your butt hole tickled. Sheeeesh. Get's called out and "whines" about it. 

You threw the first snide comment, so don't get upset when he came back at you.  I read it the same way he did.  You've both had your say, now go to neutral corners and get back to the topic at hand.

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