I co-signed a loan with my dad when I was 19 for his house...

[danimarie]

What is the name of your state (only U.S. law)? this was in Minnesota (I currently live in TX.)

I was still living at home and my parents had mostly built a second house that they were supposed to sell right away back in 2005 when the market was still pretty good. My dad ran out of money to finish and asked me to co-sign a loan with him because I guess he already asked for a lot of money from the bank. I told him no about 5 times, but he kept pressuring me and I was still living at home with my fiance. We were going to be married in a month or so. My dad said they'd get it paid off and it would look nice on my credit. I was totally clueless about anything and when I went in to co-sign, no one explained anything to me really. Just showed where I needed to sign. Now, they still have to stupid house they built that was supposed to be sold. My sister is living in it and paying the absolute minimum payments. It's a $43,000 loan. Is there anything I can do? My dad recently lost his job and they are almost failing to pay their loan for the first house. The loan was taken out on the first house (the house they live in) to finish the second house. I think it is pretty unethical that I was allowed to co-sign a loan with dad for that stuff. It was pretty obvious that I was under his rules still and felt like I had to go along with things.

If my dad doesn't pay at some point, can I just suggest to the bank that they take the house(s)? They are not in my name, but if they don't pay and I won't pay, that was the collateral. I assume this would mess up my otherwise good credit, but I cannot afford to pay that loan if it should come down to me. I'm married with 3 kids now.

Thanks.

 

[Mass_Shyster]

Bankruptcy and death are the only ways I'm familiar with to discharge a debt.

You were an adult when you signed, so you are liable for the debt.

 

[Ohiogal]

What is the name of your state (only U.S. law)? this was in Minnesota (I currently live in TX.)

I was still living at home and my parents had mostly built a second house that they were supposed to sell right away back in 2005 when the market was still pretty good. My dad ran out of money to finish and asked me to co-sign a loan with him because I guess he already asked for a lot of money from the bank. I told him no about 5 times, but he kept pressuring me and I was still living at home with my fiance. We were going to be married in a month or so. My dad said they'd get it paid off and it would look nice on my credit. I was totally clueless about anything and when I went in to co-sign, no one explained anything to me really. Just showed where I needed to sign. Now, they still have to stupid house they built that was supposed to be sold. My sister is living in it and paying the absolute minimum payments. It's a $43,000 loan. Is there anything I can do? My dad recently lost his job and they are almost failing to pay their loan for the first house. The loan was taken out on the first house (the house they live in) to finish the second house. I think it is pretty unethical that I was allowed to co-sign a loan with dad for that stuff. It was pretty obvious that I was under his rules still and felt like I had to go along with things.

If my dad doesn't pay at some point, can I just suggest to the bank that they take the house(s)? They are not in my name, but if they don't pay and I won't pay, that was the collateral. I assume this would mess up my otherwise good credit, but I cannot afford to pay that loan if it should come down to me. I'm married with 3 kids now.

Thanks.

You signed on the loan guaranteeing you would pay on it. Guess what? You get to pay on it. You don't pay and you will ruin your credit. You seem to want to blame everyone else for your stupidity. Fine. Do that. It doesn't change your responsibility or your ignorance. And your ignorance at the time is NOT an excuse.

 

[BigMouthWino]

Bankruptcy and death are the only ways I'm familiar with to discharge a debt.

You were an adult when you signed, so you are liable for the debt.

You can remove death from that statement if there are any assets in the decedent's estate.

 

[FarmerJ]

I suggest you bring your self up here to see if your sister is keeping the place in good shape , then while your here (arranged ahead of time) see a atty to learn what your options might be. Then go back to mom and dad and I suggest its time to put your foot down if the home up here is in reasoinably good shape to sell even if it means that your sister buys it with new mortgage to pay off what is owed , If sis refuses to buy it too bad for her ,then push even harder for it to be sold on open market ( you may have to come of as a <5 letter word> and with a total poker face tell your parents if you end up having to make payments due to your co signing and them failing to pay you will take legal action. BTW do you know exactly how much your sister is paying to rent the house from them compared to the local rental market ?

 

[LdiJ]

You signed on the loan guaranteeing you would pay on it. Guess what? You get to pay on it. You don't pay and you will ruin your credit. You seem to want to blame everyone else for your stupidity. Fine. Do that. It doesn't change your responsibility or your ignorance. And your ignorance at the time is NOT an excuse.

The OP was a 19 year old kid at the time and his parents high pressured him into doing it. I think that entitles him to a little less harshness.

 

[justalayman]

when you say: co-sign, do you mean as a co-borrower or as a guarantor? What rights you have concerning information and dealing with the loan are different for the two.

The loan was taken out on the first house (the house they live in) to finish the second house.

as a heloc or a primary mortgage?

if it was a primary mortgage, by chance, did you happen to demand a change of title with you being put on as co-tenant?

basically, there is little you can do, at least right now, other than plan on making the payments or letting it ruin your credit. If you make the payments, that will obviously stop any adverse action by the lender from taking place. If you don't make the payments, the lender can hound you and even sue you and likely obtain a judgment. Depending on the actual type of loan it is, what the lender can do or is likely to do varies.

 

[danimarie]

Thanks to those that were actually helpful. To those who were rude, why bother answering? You are not helping.
I am a stay at home mom of 3. I grew up in an abusive home.

It is a "home equity loan." The payments are $341 a month. Only $28 a month is going to the principal. I just called and found out I am a "co-borrower."
They explained to me that if we all end up being unable to pay, the house my sister is living in is the collateral and they will foreclose on it. Of course, my credit score will take a huge hit. He told me since I was pretty much forced into the loan, I could seek legal advice and maybe they could do something, but I don't have money for that and I don't know if it would change anything. I've been pressuring my mom to put the house up for sale and trying my best to sound extremely serious about it. Every time I talk to her I tell her to do it. I explain to her the situation her and dad have put me in and how much stress it puts on me, but honestly, she a very selfish person and I don't know if any amount of pressure from me will do anything. I think my dad actually wants to try to sell, but my mom is attached to having her house and having my sister living next door and is in denial of her situation. It's a cruddy situation, I'm not blaming everyone else in life for my problems. I'm actually the type to take responsibility, but there is no doubt I was wronged by my parents in that situation. I love them, but I really don't like them.

Another question. Will they come after my husband's money in this situation as well? We don't have a lot, but I remember they started draining my parents accounts to the point they had nothing to live on. If I remove my name from the joint accounts, will that protect us?

 

[xylene]

I'm going to give a contrarian opinion.

You are a stay at home mom. Are you using credit much? Who cares if your credit score is in the toilet then?

Americans WAY overvalue their credit score. It is not your worth as a person.

Your parents are using your fear of credit risk to abuse you still.

The problems they face by foreclosure are so much greater than your credit risk.

They might just find a way to start paying once you are no longer willing to be abused.

 

[Ohiogal]

The OP was a 19 year old kid at the time and his parents high pressured him into doing it. I think that entitles him to a little less harshness.

If OP is a "He", he deserves sympathy for being named Dani Marie -- the bullying he got must have destroyed him.

 

[danimarie]

I'm going to give a contrarian opinion.

You are a stay at home mom. Are you using credit much? Who cares if your credit score is in the toilet then?

Americans WAY overvalue their credit score. It is not your worth as a person.

Your parents are using your fear of credit risk to abuse you still.

The problems they face by foreclosure are so much greater than your credit risk.

They might just find a way to start paying once you are no longer willing to be abused.

Thanks. I guess I worry too much about it. My credit does get checked whenever we go to rent an apartment for some reason. The other thing that makes me worry is if anything ever happens to my husband. But, I guess places will potentially still rent to you if you were a good renter in the past and you explain what happened to your credit?

 

[Ohiogal]

Thanks to those that were actually helpful. To those who were rude, why bother answering? You are not helping.
I am a stay at home mom of 3. I grew up in an abusive home.

Time to get a job. You were an adult when you signed.

It is a "home equity loan." The payments are $341 a month. Only $28 a month is going to the principal. I just called and found out I am a "co-borrower."

You are responsible for paying back the money.

They explained to me that if we all end up being unable to pay, the house my sister is living in is the collateral and they will foreclose on it. Of course, my credit score will take a huge hit. He told me since I was pretty much forced into the loan, I could seek legal advice and maybe they could do something, but I don't have money for that and I don't know if it would change anything.

You were NOT forced into the loan -- legally there was no duress or coercion. You made a bad mistake. That is on you. Your ignorance is on you. You signed the loan as an adult -- and we will assume as a competent adult. Therefore, you will be held to the terms of the loan.

I've been pressuring my mom to put the house up for sale and trying my best to sound extremely serious about it. Every time I talk to her I tell her to do it. I explain to her the situation her and dad have put me in and how much stress it puts on me, but honestly, she a very selfish person and I don't know if any amount of pressure from me will do anything. I think my dad actually wants to try to sell, but my mom is attached to having her house and having my sister living next door and is in denial of her situation. It's a cruddy situation, I'm not blaming everyone else in life for my problems. I'm actually the type to take responsibility, but there is no doubt I was wronged by my parents in that situation. I love them, but I really don't like them.

You were wronged by your parents but you also wronged yourself by signing on a loan as a coborrower without comprehending what you were doing. Your ignorance is your biggest issue.

Another question. Will they come after my husband's money in this situation as well? We don't have a lot, but I remember they started draining my parents accounts to the point they had nothing to live on. If I remove my name from the joint accounts, will that protect us?

No. Not really. Why? Because it will look as though you are trying to hide assets by removing your name from joint accounts. Your husband would be better off opening a new account and keeping the joint account. However, it won't help your credit for him to do that. You need to get employment to start paying off this loan.

 

[danimarie]

@ Ohiogal - I'm going to ignore that you were a bit harsh again. Must be your personality...

Do you know how much day care for 3 kids is? I wouldn't be a skilled worker, so do the math and as far as I know the job market is still pretty crappy. Which is better, forclosure or a hand out for child care from the government every month? Also, as a Reformed Christian, I have moral opposition to sending my kids to public school or day care. I homeschool. I do feel like the bank would get their money back by foreclosing on the house and selling it. It's a $43,000 dollar loan and the house and property are worth probably $100,000 at least. 3 acres of land and the house is in fair condition. It's also located in a pretty country setting in the woods with a fair amount of privacy and it's not too far out from the closest city.

 

[xylene]

You need to get employment to start paying off this loan.

While I fully agree that every able bodied adult should participate in the labor market, Bankruptcy would be a better option than years of desperation to repay a bad decision made to serve abusive parents.

The OP is young, has a massive debt and few assets.

The loan itself is near-predatory terms.

I can't think of someone with a more sound reason to default and file.

 

[Ohiogal]

@ Ohiogal - I'm going to ignore that you were a bit harsh again. Must be your personality...

Do you know how much day care for 3 kids is? I wouldn't be a skilled worker, so do the math and as far as I know the job market is still pretty crappy. Which is better, forclosure or a hand out for child care from the government every month? Also, as a Reformed Christian, I have moral opposition to sending my kids to public school or day care. I homeschool. I do feel like the bank would get their money back by foreclosing on the house and selling it. It's a $43,000 dollar loan and the house and property are worth probably $100,000 at least. 3 acres of land and the house is in fair condition. It's also located in a pretty country setting in the woods with a fair amount of privacy and it's not too far out from the closest city.

Yet as a Reformed Christian, you have no problem with walking away from your promises and showing that your word means nothing. As a Reformed Christian, you also have no problem with taking money without paying it back. Understood. Get on with your good Christian self.