Ever co-sign a loan and you wind up paying?

[mamamary]

Hi. Long story short. Elderly family member co-signs loan for younger family member. Young one decides to stop paying, elderly one gets some kind of legal paperwork forcing her to pay. Young one (lives out of town) totally ignores any contact from elderly one.

So I'm just trying to see what us other members of the family can do. Just looking to see if this has happened to anyone else.

Thanks.

 

[lovesmurfs]

Hi. Long story short. Elderly family member co-signs loan for younger family member. Young one decides to stop paying, elderly one gets some kind of legal paperwork forcing her to pay. Young one (lives out of town) totally ignores any contact from elderly one.

So I'm just trying to see what us other members of the family can do. Just looking to see if this has happened to anyone else.

Thanks.

That's why Dave Ramsey says to NEVER co-sign a loan for ANYONE. If someone needs a co-signer for a loan, it's because the bank doesn't think the primary loaner will pay it back.

Barring a can of [edited] from the other family members to the Young One, the only thing you can do is forward funds to the Elderly One to help pay. Elderly One is responsible for the loan.

 

[The Mystery Machine]

Hi. Long story short. Elderly family member co-signs loan for younger family member. Young one decides to stop paying, elderly one gets some kind of legal paperwork forcing her to pay. Young one (lives out of town) totally ignores any contact from elderly one.

So I'm just trying to see what us other members of the family can do. Just looking to see if this has happened to anyone else.

Thanks.

No, because I would not do it ever, even with my own flesh and blood.

Now I would buy said item in my name and then do "rent" for "item" from a family member if the circumstances were needed.

Pretty much your elderly relative has to pay off the loan, she is legally bound.

 

[kellyg403]

That's why Dave Ramsey says to NEVER co-sign a loan for ANYONE. If someone needs a co-signer for a loan, it's because the bank doesn't think the primary loaner will pay it back.

Barring a can of * from the other family members to the Young One, the only thing you can do is forward funds to the Elderly One to help pay. Elderly One is responsible for the loan.

And I would imagine the only legal recourse would be for the elderly relative to file a claim against the younger relative. The problem with that type of thing is that you can probably get the judgement but you will have to pay to go back to court to get a garnishment etc. The whole thing would end up costing more than the initial bill. And the younger relative could still avoid paying up.

I, personally, would not be able to sleep with myself at night. Families, sometimes there is always one in the crowd

 

[klacey1]

I don't have any experience in co-signing a loan for anyone else, but I have had my parents/brother co-sign for me on student loans back in college. I think to say NEVER CO-SIGN A LOAN FOR ANYONE is too much of a blanket statement. Mystery Machine, would you really not sign a student loan for your child? Most REQUIRE a co-signer. I would have been able to finish school without them doing that for me...
OP, I don't really know what the elderly person in question can do, but I hope the situation works out somehow

 

[agnes!]

What I would do? Barring Young One being incapacitated in the hospital or some other similar circumstance, I would at least make sure Young One knows that they are persona non grata at all future family-functions...I'd cut them off without a moment's hesitation.

Btw, how does the rest of the family feel about your deadbeat relative?

agnes!
PS - And yeah, unfortunately Grandma is now liable for the loan payments.

 

[The Mystery Machine]

I don't have any experience in co-signing a loan for anyone else, but I have had my parents/brother co-sign for me on student loans back in college. I think to say NEVER CO-SIGN A LOAN FOR ANYONE is too much of a blanket statement. Mystery Machine, would you really not sign a student loan for your child? Most REQUIRE a co-signer. I would have been able to finish school without them doing that for me...
OP, I don't really know what the elderly person in question can do, but I hope the situation works out somehow

You are making assumptions. I am signing plenty of student loans for my freshman.

I am talking about items, like house, car, apartment, etc....

I would be the person to SIGN for it or buy it and not be a cosigner. In other words take 100% of the risk primarily and then have my dd's pay me back on the side.

 

[LindaR]

The ONLY person I have co-signed a loan for is my daughter.....her student loan. Got a much lower interest rate that way.

I would never do it for anyone else.......EVER!

I have raised my daughter solo since she was 1.5 years....and we are super close. Her morals have been "tested" by others as she was growing up and I know how strongly she withstood that pressure. The chance of her defaulting on a loan is, in my opinion, the same chance of ME doing it! Zero! ESPECIALLY to me.

I kinda feel sorry for your younger family member because that person will realize (too late) how many bridges have been burned and what an awful thing it is to disrespect a family member like that.

 

[Disney Doll]

I have always been a believer in "There is no such thing as a loan to a family member or friend. It is a gift." If the loanee pays it back, I consider it a nice surprise.

I never loan people money that I cannot afford to lose. I would not co-sign a loan if I could not afford to pay it back myself.

Unfortunately Elderly Relative is on the hook now as co-signer.

Young Relative would be written off by me, no questions asked.

 

[Tuffcookie]

How old is the elderly relative? Is there any history of dementia?

This actually happened to my step father years ago. My sorry excuse of a nephew talked my step dad into co-signing for a car loan. It started out that he was just taking my step dad to "look" at cars with him. (I don't remember where my mom was at the time) Then, when nephew saw a car he wanted and couldn't get the loan with just his name only, the saleman helped convince step dad to co-sign.

I don't know what my mom said to the bank and car dealership when they started calling, asking for their money, but my dad had been diagnosed with dementia before nephew took him out.

I had mom check her and step dad's credit report and nothing was found.

TC

 

[4greatboys]

I co signed a loan for my son when he bought his first car. He definately needed a reliable car for work and school and just starting out he had very little credit. He has not missed one payment in 2 years. I do not regret helping him out him at all.

 

[akcire]

Our old neighbors co-signed a car loan for their nephew--he stopped paying. They took physical possession of the car (hid it in our garage) and sold it after he missed 3 or 4 payments.

How did they get the car since he was avoiding them you ask? Well they knew he would attend a certain family function (his birthday) and they brought both of their cars and boxed in his car. He tried to fight them and not provide the keys-he even called the police. Police told junior to hand over the keys, and told my neighbors to hide and then sell the car.

They took a loss, but at least they were done paying to subsidize the nephews life.

 

[NeverlandClub23]

Back in my much younger (and not so smart) days I took out a loan for my boyfriend at the time to get a boat. He had a really good paying job but lousy credit. He paid me every month for two years but after finding out he wasn't being faithful, I left him. He would pay me every month but on his terms (i.e. had to go out to dinner with him, etc. couldn't just drop it off) so I eventually got sick of playing his game and started paying it myself (the boat was kept at someone's house so I never even got to use it). When the insurance came due (something like $700) I had had enough. I was working at a bank at the time and close with the branch manager. She told me if I could get him to sign a new loan she would give him a loan. I spent a couple of weeks sweet talking him like I was going to take him back, he resigned to a new loan (and gave me $1,500 for back payments) taking my name off, and I never talked to him again .

It could've been much worse but I learned my lesson!

ETA: My parents co-signed for two loans for me when I purchased vehicles. I never missed a payment and am very grateful for their help

 

[Northstar]

Not to be rude or diminish your family member's dilemma, but what happened here is exactly what co-signing a loan is all about. When you co-sign, you are taking on a responsibility for making sure the lender gets his/her money repaid.

So if you co-sign a loan, you'd better be darn sure you are prepared to take on that debt if necessary.

No amount of sweet-talking or promises that I'd never have to pay would make me co-sign on a loan if I wasn't prepared to actually give/lend that money to the person asking me to co-sign.

 

[Planogirl]

My father co-signed a loan for my first car but he was quite nervous! I was so careful to make sure that my payments were early because I knew that he'd be responsible if I messed up.

 

[holycow]

I'd be taking a trip to go out and visit said family member and having a little talk.

If it was for a car I'd be driving the car home.


If it was for something else I'd be making arrangements with Family member to help them remember their responsibilities.

 

[PaulaSue]

MY MIL did. IT was a HUGE mess and ended up going to court to get teh car repo and then title changed and then sold to recop some of her money. She lost over $3000 out of the whole thing

DON"T co-sign EVER!

 

[mamamary]

WOW - thanks for all the replies

I can't answer all ques. as I'm packing for disney but to try and answer a few:

It's my mother in law - late 70s
Loan was a school loan for her granddaughter.
Noone knew she co-signed or we would have insisted she not
I told my DH we need to take a trip to where g.daughter lives - it's in another state but only a few hours away.
This all just came to light two days ago when my DH called his mom. It's really just starting to sink in.
I feel mother in law is stuck - she signed the papers but honestly I don't think she would have the $ to pay it all back. She said she totally trusted the granddaughter.

Since we're leaving for Disney soon I think unfortunately any help from us has to wait until we get back.

I appreciate all your input.
Mary

 

[wdwfan16]

If I were to co-sign a loan I would be prepared to pay the entire loan back. I would not want to do this so I have never and have not intentions of every co-signing a loan.

 

[mamamary]

If I were to co-sign a loan I would be prepared to pay the entire loan back. I would not want to do this so I have never and have not intentions of every co-signing a loan.

I agree.