Expert: Morgan Smith - 7/1/2011

Question
About a month ago, I went with a friend of mine to help her purchase a vehicle, and to act as a co-signer. After hours of credit checks and whatnot, we were told by the salesmen that her credit was bad to the point that in order to put the car in her name, she'd have to mmake payments that were beyond her means, and so they persuaded us to put the car in my name, with her making the actual payments. Now w're already behind on the first payment, and the 2nd payment is due within a week, or it goes on my credit. I already have one car, which I just recently re-financed. Are there any options available? Ican't cover both vehicles!

Answer
Dear Steve,

Before I respond further to your question, I must make clear that I do not represent you, and cannot give you individual particularized legal advice. No attorney client relationship is created by this email. For legal advice, you should hire your own attorney, and follow their advice. My role with AllExperts is limited to providing general information and suggestions for educational or general knowledge purposes.

Before you take any action, consult with your own attorney. Speak to an attorney licensed to practice law in your state about the strengths, weaknesses, and likely outcomes of any contemplated cause of action or defense.

Your question is about co-signing on a loan.  

My contracts professor would have me shot if I didn't begin at the beginning and urge you to look at the loan agreement that you signed.  I fear that you did not read that carefully before you signed, and you may not have appreciated the promises you made and liability you created for yourself if your friend fails to make her payments.  It sounds to me like you are a gaurantor or person that guaranteed your friends payments will be made.

Take the loan agreement to an attorney for help, and see if the contract and/or rules of your state allow you time to rescind.  My guess is that, since the 2nd payment is nearly due, you have already long past your rescission period.

If returning the car is not a viable option, my other suggestion is to help your friend make her payments, and sue her friend if she won't/can't.  

I hope this helps, good luck to you.

Morgan Smith
SMITH & RAVER LLP
Minneapolis, Minnesota
smith-and-raver-llp.biz
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