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Co-signer liability

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Michaeel

Junior Member
What is the name of your state (only U.S. law)? New York

I co-signed a car loan for my 28 year old daughter three years ago and two years ago she sold the car, She defaulted on the loan after the purchaser stopped paying her installments on the purchase and the car was repossesed by the loan company. As the co-signer of her loan do I have any legal responsibility to the purchaser of the car. He is suing her in small claims court and has named me in the suit because I co-signed her car loan. I had no dealings with the purchaser and did not know my daughter sold him the car illegally.
 


cosine

Senior Member
If your daughter's loan was still in effect, and still obligating her to pay it ... as opposed to the buyer getting his own loan and paying her to buy out her loan ... then you are as obligated as she is. But that obligation is to the bank that made your daughter's loan. If the bank was able to sell the car before more than was owed on the loan, you owe the bank nothing. Otherwise, you could still owe the bank the difference if your daughter fails to pay it.

Now your issue is that the buyer is upset because the bank took the car back (it surely had a lien on it). Yes, the question of whose name is on the title is very relevant to how that might be presented in court as a defense. But also is the buyer's awareness that there is a lien on it, at the time of buying it. So did he do a proper title transfer? ... with a lien on it?

Find out what your status is with the bank, first, and if there is any amount owed to them. If you owe money to the bank, go pay it in exchange for a release of obligation. Now you have a document that says you are no longer involved.
 

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