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Posted in Auto Loans
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Question By
Cassousou

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How do I remove my name from an auto loan I co-signed for?
I co-signed an auto loan for my brother 3 years ago but after a total-loss collision in August he hasn't made any payments. He thought he full coverage when in fact he didn't. The loan has been charged-off and the all missed payments are hurting my credit. I have never driven the car nor made any payments myself. The car was solely for him and our agreement was that was responsible for the car. I didn't even have a drivers license until a year ago. We're not on the best of terms and he's ignoring my calls. What are my options? $16,000 is still owed to the bank.

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You can't

You signed the loan paperwork to be a responsible party. Regardless what agreement you had with your brother, you signed a contract with a lender that trumps any verbal agreement. You could pay it, file bankruptcy on it, but eventually they will go after the signers of the loan (including you) and could garnish wages.

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Why to never cosign

A cosigner virtually guarantees that the original borrower (your brother) will pay the loan as agreed or else said cosigner will make the payments and be responsible for the loan.  Sorry to say, you are stuck right now.  

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You should speak with an attorney on this. If your lucky a loophole may get you out of paying, probably won't remove it from your credit though. It is usually REQUIRED that full coverage insurance is on a financed vehicle, if the insurance is cancelled or changed, then the lienholder is supposed to be notified. Apparantly, that never happened. How were you to know this, that the loan you signed on was not protected as is required by law. Call a consumer law attorney.

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