Legal Advice Needed:Loan co-signing

[Guest]

Help!

My husband and I just discovered that his elderly dad co-signed a car loan for one of our nephews (it was about a year and a half ago).

This happened while dad was taking care of his wife at home (she was in the last stages of Alzheimer's). During this time, he was under constant stress, he didn't sleep, and in fact had a total collapse/breakdown and was hospitalized for exhaustion. We finally helped convince him to move her to a nursing home, and she passed away a few months later.

In order to get the car, the ex-wife had to stay with mom while her son (the nephew) took dad out to co-sign. Our nephew is 19 years old, and naturally the little shit hasn't been making payments. Dad told the company to just repossess the vehicle, but they cannot find it or the nephew right now (typical). We're getting no help from the ex and her family, either. Very sneaky.

These deadbeats live in the same town as him and we are almost 2 hours away (though we are in the process of helping dad find a house in our town). Dad is quite embarrassed about the whole thing, but he can't afford to make the payments and doesn't know what to do.

Question: Is there any legal way to get him out of this co-sign? Can we claim some sort of duress or diminished capacity? He was under a great deal of stress at the time. We haven't spoken with a lawyer yet, but that's our next step.

Any suggestions??? (I'll be gone until this evening, but maybe someone has the answer! I hope there's a way out of this!!!) Thanks!

 

[SINthysist]

You'd be looking for Siren, but free advice is worth what you pay for it...

 

[Bindii]

I am not a lawyer but I imagine that it would be difficult for your father to get out of this. Is there no way that you can track down the nephew...even a place of work would help. Then they could reposses the car and leave your Dad in peace.

Bump for the lawyers.

 

[Ishmael]

I am not a lawyer but I imagine that it would be difficult for your father to get out of this. Is there no way that you can track down the nephew...even a place of work would help. Then they could reposses the car and leave your Dad in peace.

Bump for the lawyers.

What she said.

It's very difficult to prove diminished capacity. The legal fees alone could run higher than the balance on the automobile and there would be no garuntee of success.

Work diligently with the note holder to resolve the issue. In the long run it may prove cheaper to "buy" the note from the lender after the vehicle is found.

Typically in repo case's the repo fees are added to the note, then the vehicle is sold at auction. Auction prices are rock bottom wholesale and then the lender comes after the borrower/co-signer for the difference. And there is always a difference.

Buying the note and selling the auto on the private sale market will reduce this difference and less money will be lost. Further, this arrangement will preserve your father's credit while squashing the credit of the nephew.

Ishmael

 

[dreamer]

I'm no legal expert either...but I do know (at least in Ohio) if you've co-signed it's exactly as if you took out the loan yourself. You are equally responsible.

Having said that I THINK the only (or at least primary) recourse would be to go after the nephew in court. But that opens that whole sueing your family can of worms...which leaves a yucky taste in my mouth.

Be sure to let us know how this works out. I think this is probably a more common problem than anyone would expect and more often than not the second party just ends up sucking it up and paying the loan off...

 

[Barely__There]

Where, in all this, is said nephew's parents..or at least the parent related to your Dad?

Perhaps the knowledge that the cost of the car (plus interest for stress and aggrevation) will be deducted from any inheritance, or complete cutting out unless they take action would have an effect.

 

[Guest]

Thanks everyone!

I appreciate the terrific suggestions and best wishes (the PM's too)!

We did speak with a lawyer today. (We live in Kansas, this situation is in Missouri, so that does add a bit more confusion) But she echoed what many of you have said: co-signing is very binding, proving capacity is expensive and would be humiliating to our dad, and taking the matter to court (whether or not the nephew is found) is also expensive and time-consuming.

The nephew's dad (my husband's brother) is no help, unfortunately. He is an alcoholic (won't admit it) has his own diminished mental capacity (from booze) gets fired from a different job every week, mooches off everyone he knows, etc. It's a shame. He had the same chances as my husband when they were growing up.

We are going to pursue this ourselves for awhile. We have the loan information now, and we've also uncovered some new personal info of the nephew. (lol) We knew he was enrolled at MU in Columbia, but maybe now we can find an accurate address through enrollment records. If so, I imagine my husband and several of his coaching friends will go chat with the little punk.

This entire thing is so upsetting! Our dad should not have to go through this (especially when all he was trying to do was be nice). He's not rich; he just has enough to be comfortable in his retirement.

Thanks again for your kind words. It really helped me to write it down and have caring people give me their thoughts.

Thanks!

Sarah

 

[Siren]

 

[Guest]

Phew................dodged another one.

Blows you a kiss -

I think I just needed to vent - I wasn't searching you out specifically!

I would have PM'd you if that had been my intent (oh, uh, by the way, ignore that PM! )