Car repossesed, creditor is now collecting

California -

My sister co-signed for a vehicle with her boyfriend. They have broken up, and the creditor repossessed the car because of boyfriend's non-payment. The creditor auctioned the car off for $4,000 which leaves a balance of $6,000 which they are now collecting from my sister.

What could my sister do -- make an arrangement with the creditor (a credit union), and/or can she litigate the the boyfriend for the repossession amount? The boyfriend has financial assets.

Much thanks,
newkid

[JETX]

By co-signing the loan agreement, your sister made herself liable for any breach by her boyfriend.

"What could my sister do -- make an arrangement with the creditor (a credit union), and/or can she litigate the the boyfriend for the repossession amount?"
** She can make the payments to the creditor and then take legal action against the (ex) boyfriend to recover her damages (payments she made due to his breach).

One problem she will have is that CA small claims court limit is $5000. She will either have to 'foregive' $1000 of her damages to keep the case in that court, or have an attorney to file in a higher (Superior) court.

Also, she can't claim 'future' damages... only those that she actually incurred. Simply, this means that she will have to pay first, then sue.

[I AM ALWAYS LIABLE]

[quote]Originally posted by Halket
[b]


"Also, she can't claim 'future' damages... only those that she actually incurred. Simply, this means that she will have to pay first, then sue."


=====================================

My response:

I agree with my good friend, "Halket", up to the point where he stated the above.

Actually, no. In California, she can sue the boyfriend at any time - - even before she pays "penny one" to the creditor, because her damages are "calculable" under the contract. Also, she doesn't necessarily have to "wait" to sue because her Statute of Limitations is ticking away as to her potential action against her former boyfriend; ergo, she doesn't "have to pay first, then sue."

IAAL

[JETX]

Ah, another difference between CA and TX law.