Cosigned for a car

[Dawnnette Koonc]

I live in Texas, & my dad cosigned for my nephew to get a car. He's on social security, & three different credit check companies said he wasn't qualified to be a cosigner, but because my nephews brother works there, they allowed him to consign. They used my dad's bank account as collateral, but because I am co-owner of that account, they asked me to get a printout with JUST my dad's name on it. First of all, is that legal ? And second, can they take money out of our account ? My dad is 75 yrs old, & since my nephew hasn't made a payment since may, $750 a month, he doesn't need the harassment.
Basically, what can they do ?

 

[adjusterjack]

Basically, what can they do ?

To your Dad?

They can sue him and get a judgment, which probably wouldn't be worth the paper it would be printed on since his social security is exempt and his house (if he owns one) has homestead protection against creditors.

However, if he has decent cash assets, his bank account can be levied and the debt paid out of that money.

There was nothing illegal about the transaction itself although your Dad might be guilty of fraud for presenting a bank statement that hid the fact that it was a joint account. I doubt if anybody will admit to asking for it that way.

Your Dad might not "need" the harassment but he's certainly going to get it, which is often the consequence of co-signing.

People need co-signers because they are bad credit risks. Lenders are too smart to lend to bad credit risks unless they get a good credit risk on the hook because they know damned well that the bad credit risk will default and the good credit risk will pay to avoid becoming a bad credit risk.

Your Dad has the option of letting the car get repoed, waiting for it to be sold and then decide what to do about the deficiency.

What he shouldn't be doing is paying the $750 per month and letting the deadbeat nephew keep driving it.

 

[LdiJ]

I live in Texas, & my dad cosigned for my nephew to get a car. He's on social security, & three different credit check companies said he wasn't qualified to be a cosigner, but because my nephews brother works there, they allowed him to consign. They used my dad's bank account as collateral, but because I am co-owner of that account, they asked me to get a printout with JUST my dad's name on it. First of all, is that legal ? And second, can they take money out of our account ? My dad is 75 yrs old, & since my nephew hasn't made a payment since may, $750 a month, he doesn't need the harassment.
Basically, what can they do ?

What you need to do is get that account cancelled and open a new one at a different bank...because they are going to go after that account.

 

[single317dad]

they are going to go after that account.

Maybe. That will depend on several factors, including what the source(s) of funds in the account are and how much OP can prove belongs to them and not Dad. There are generous exemptions to levies, which I'll grant are not very useful until the account is already frozen.

 

[LdiJ]

Maybe. That will depend on several factors, including what the source(s) of funds in the account are and how much OP can prove belongs to them and not Dad. There are generous exemptions to levies, which I'll grant are not very useful until the account is already frozen.

They want to move the account even if his only income is Social Security. Yes, if all he has is SS income its exempt from a levy, but his account will end up frozen anyway for a few weeks until he does prove it. Yes, if they get a judgment against him and find the new account he might have to go through that anyway, but by moving the account they at least make it less likely.