I had to break your comment up into sections to more easily read it. So let’s see if I’ve got it. Old debt on a jeep, repo, left over debt from sale of jeep and previous balance on the loan…
You are cosigner.

As a cosigner you are obligated to see that this debt is satisfied or your credit report will suffer. Thats why we have co-signers… to help others ruin our credit…. Just kidding…

In this case your credit is on the line. You’ve been doing an excellent job of trying to stay in the loop. You should. I would go to court as though my ex bf didn’t exist. I would talk to the judge about the circumstances… the one’s that you’ve briefed me on above.. Then try and cooperate with the court. But place as much pressure on ex bf to satisfy the debt as possible. In fact the court should place the blame on the ex and try and work with him mostly… let’s hope.. however, you are responsible for this debt.. as much as him

The court will understand that you are in the middle of this situation without having caused it… so they’ll likely look kindly on you… the problem is your credit report. I honestly don’t know how this will play out on your credit file. Perhaps you will come back and let me know later on (thanks in advance!!) But to get to my overall point.. go to court and participate as much as required. Remember it’s your credit on the line…

Also, I think you should read the following conversation.

Good Luck!!

I apologize in advance…this is a lengthy question. I just want to provide as much info as I can. I have been documenting all my communications to be prepared as a friend told me to do this.

I cosigned a loan for an ex-boyfriend on 11/26/2002. (Yes – I have painfully learned my lesson to never cosign again!) I was 20 years old at the time, attending college, and very naïve and unaware of what the consequences of my contract obligation would be. The ex was also pretty oblivious when we did this. We were stupid college kids. I signed it because my ex-BF promised he would make his payments on time. The loan was also quite upside down at the time but I did not realize this until after the fact years later when there was a problem…I signed away just trusting the ex would pay the payments and did not think twice. It is an 84 month loan for a used 1999 Jeep Grand Cherokee. He traded in two lease cars for this loan. The amount financed on this date was 27.7k and 37.2 for the total sale price.

Anyway, of course, he started not making payments in 2004 and 2005 and not telling me this. I found out when the bank sent me a letter that payments were 60 days late. At the time we lived together and I was notified. I paid these immediately after being notified and scolded him not to do this again as it was leaving negative marks on my credit report. He was paying for a few years until recently the credit union actually called me in May 2008 asking for March and April’s payments. At this time, I am out of college and working but living paycheck to paycheck as many Americans now are. I can only afford to pay for my “own” financial obligations and cannot pay on his car anymore. (I only did this 3 times or so the payment was so high and I have been eternally broke since college paying my own way through).

We have been broken up now for 4 or 5 years now and have not lived together since. I did call him and ask why he had not paid for March or April and not told me. He told me that he gave the keys to the car to the bank in late April and intended not to pay anymore. I called the bank to verify this and they told me that they had not received the vehicle. At first I tried to negotiate a settlement but they said they could not do a settlement without the car because they need to sell the car then have it go to the recovery department. I told the bank they could repossess the car (which I didn’t know they needed my permission to just say so! I found this out by fluke). I did not know much of his whereabouts just his mailing address that they already had and his cell phone number. I called the bank a week later and it had been repossessed. I gave her my address so she could send me the letter of notice to sell the repo. It went to his address but not mine so I called to clarify that we had not lived together for 5 years and to mail any future correspondence to my current address.

A week letter I receive a letter with new amount owed after selling the repo. As of May 2008 the remaining balance was 15.7k and they say the sale of the vehicle resulted in proceeds totaling $2k for a remaining deficient balance of $9441.86. My credit report is showing this as a charge-off as bad debt in May 2008. Still being unable to pay I let the bank know that I could not pay it. By luck, the ex called to let me know that he received a summons to go to court about this and that my name was also on the letter and that I should go too. I asked him to send me a copy of the letter so I could have more detail but he never did. Therefore, frightened that I would miss a court date I called the bank to ask them to send me the info.

I was pretty upset because what if the ex never called me and assumed I also received the letter? They were not keeping me in the loop and finding out from the ex is not the most reliable info. They would have thought I did not show up to court on purpose when in fact I never knew I needed to. When I called, at this point, they said it was now with a collection agency and I needed to call them. I called the agency and it was like pulling teeth to figure out whether I needed to show in court or not. I asked them to send a copy of the letter. They admitted they sent the letter only to his address and not mine. I gave them my info. I received the notification that they are representing the credit union to collect the debt from me and that I can dispute the amount in 30 days.

The letter was dated Oct 29, 2008 so I still have time to respond if need be. But I don’t think I need to dispute the debt it is real. Should I sent a response letter that I have received their communication but cannot pay? Or is this detrimental and maybe I should just not respond? Guess I just need to wait and see if I really do need to go to court? They told me that I was not being summoned at all just him and my name was just on the letter he received since I am the cosigner. Turns out he never showed up in court either. Not sure what his plans are. I don’t know what I can really do here. Do I just sit and wait to be summoned? They said they will try to collect from him first but this whole situation is just stressing me out. I don’t want to have to file bankruptcy over this or go to court for that matter.

Thoughts? Comments? Thanks for even taking the time to read this. Any words of wisdom are truly, truly appreciated.

First off, your bill should state the principal amount of the debt as well as the interest rate. The problem here (and I’m making an assumption) is that she doesn’t have the money each month to make large payments. As a result, she is caught in a cycle of basically paying the interest on the principal each month. Is there anything she could sell to pay this debt off?

Now it seems that she owes the money and therefore wants to make good on it. However, the problem is that these collection vultures are getting rich off the interest fees and making it impossible for her to satisfy the debt. After all this is how they make their money. But it sounds like your grandmother is easy prey for these vultures and they aim to feast!

I would demand all interest charges be dropped. I would inform them that I would make a monthly payment against the principal only. They must agree to these terms in writing. If they don’t want to agree to the terms… No problem, they don’t get another dime. They could then pursue a judgment against your grandmother via civil court. In which case she (and you) could simply go and inform the judge that it was impossible to satisfy this debt due to the outrageous interest charges. Likely such actions would put an end to the interest charges and make it easier for grandmother to finish paying this thing off while she’s still young. Either way she’d have to conform to the terms of the judgment.

Also, if she makes little or no income she can’t be collected on. There’s a federal minimum (and if she makes under it) she can’t be touched. They could still get a judgment, they just couldn’t collect it.

Another option is to continue to pay what she can on the debt each month. We all need to pay our debts… I’m not debating that. But what I am debating are outrageous interest charges and fees. Collection Agencies often tack on as much money in fees and interest as they possibly can. It’s your job to inform them you won’t pay it…

Also, another option is to seek legal advice from a local lawyer you trust. It doesn’t cost much and could possibly save her thousands of dollars and fewer sleepless nights.

If more questions feel free to ask.

Good Luck!!!

Barry

I have never seen a rooster bother baby chicks as long as they were still with the mother. However, it is unpleasant to watch when she leaves them but the adults, if the babies have always been around them, have never suffered any visible signs of the pecking when establishing the pecking order.

Thanks for the comments. I can’t remember her situation exactly… However, I do recall email exchanges previous to this one that provided explanation for why she was involved in debt settlement such a short time after having filed bankruptcy. The current circumstances… had something to do with a mortgage gone bad or something….

The purpose of this article is to show in greater detail the ins and outs of the debt settlement process from people involved directly in it.