Car loans & property siezure, etc

[ladyjane07]

What is the name of your state? Ohio (1 of the involved parties lives in Kentucky)

Firstly, I co-signed on a car loan for a friend/former roommate. This was more than 2 years ago and the account is in good standing.

Now:
My friend defaulted on a student loan directly from a school. The loan was about $2000. This happened before we lived together but has been going on for about 3 years. Recently she moved to KY, and I moved to a different address in OH. She asked me if she could have her mail forwarded to my apartment, so I said yes. 3 days ago I got a notice on my front door that the clerk of courts was seizing my friend's property to pay her debt. Except she does not live there and has never lived there; she just gets a few pieces of mail per month there.

Since this happened, she has contacted a lawyer, the school's lawyer, and the clerk of courts, trying to set up some kind of payment arrangement, but (obviously) money is an issue and she is not sure if they will accept a low monthly payment. They already said that payment arrangements were an option though.

Anyway: here are my questions about all of this--
1) If they come back to my apartment, what do I do? It is 100% true that she does not and has never lived there, but there is no actual way to prove this. Same way with the fact that everything in my apartment is MINE, but can that be proved either?
2) Will they have to sue her again in her state, or is this something they just "transfer"? Basically, how long is it going to take before they are showing up at HER apartment with a notice from the court that they want to sieze her property? She has contacted the lawyers already and wants to take care of this, but how much time does she have?
3) Can they sieze her car to pay the debt? For one thing, the car is worth more than $2000. Also, it is still being paid for, so technically the bank owns it still. And lastly, my name is on the car loan along with hers. Does that affect anything?
4)If she sets up some kind of payment arrangement with them (i.e., gives them her bank account number for an EFT arrangement, or just gives them a check which has her information on it) can they use this information to sieze the account, or is that a separate process?

I know that was kind of long and convoluted. I'm definitely a worrier, so this has me all out of sorts. Any actual advice would be appreciated!

[Debt Guy]

1) If they come back to my apartment, what do I do? It is 100% true that she does not and has never lived there, but there is no actual way to prove this. Same way with the fact that everything in my apartment is MINE, but can that be proved either?

Just tell "they" that she does not live at this address and give them her new address.

2) Will they have to sue her again in her state, or is this something they just "transfer"? Basically, how long is it going to take before they are showing up at HER apartment with a notice from the court that they want to sieze her property? She has contacted the lawyers already and wants to take care of this, but how much time does she have?

Depends on lots of factors. The creditor cannot do anything until they have sued and been awarded a judgment. Then, what they are allowed to seize, garnish, etc is governed by the laws of the state in which she was sued.

3) Can they sieze her car to pay the debt? For one thing, the car is worth more than $2000. Also, it is still being paid for, so technically the bank owns it still. And lastly, my name is on the car loan along with hers. Does that affect anything?

Some states allow seizure of personal property to satisfy a judgment. And, no, the bank does not technically own the vehicle -- the bank has a perfected lein on the vehicle but it is technically and legally owned by your friend. If the judgment creditor were allowed to seize and sell the vehicle they would do so subject to the bank's lein -- which means the bank loan gets paid first. The only way this could affect you is if your friend throws up her hands and stops paying the car loan -- then the bank will demand you pay the loan.

4)If she sets up some kind of payment arrangement with them (i.e., gives them her bank account number for an EFT arrangement, or just gives them a check which has her information on it) can they use this information to sieze the account, or is that a separate process?

You really are a worrier. Take a deep breath. Her bank account cannot be garnished until a judgment has been awarded and the court has approved a bank levy. All they need to know is the name of the bank to serve the garnishment order.

[debtcollector`]

With respect to DebyGuy's excellent answers:

Student Loans are a different animal. Depending on the type of loan and the terms in the contract, they may not have to have a judgment to garnish pay and assets.

DC