I co-signed for an auto loan in 1996. The person lost their job and could not continue to pay for the car so it was repossessed. The car was later sold for an amount that I am unsure of. The case was turned over to a collection agency in 2001. We were unfamiliar with the courts and we thought the papers were telling us that it was a judgement against us and we were not aware that we could go to court and disagree with the amount that was said owed. The collection agency received a default judgement. I accepted the judgement and paid 882.00 down and 100 a month for a year and a half until I was laid off from my job. That was in January 2003. I called the agency and let them know my circumstances and never heard from them again. In 2006 the person who took out the original loan filed bankruptcy. A month ago 2008 they decided to voluntarily dismiss their bankruptcy so they could try and get their house re-financed. In July 2008 they receive a letter from the collection agency and now the debt that started at 8800 with me paying 3000 on which should have reduced to 5500 is now 13000. The person called them when they received the letter and tried to work out a payment and dispute the amount owed. He asked why had they not contacted him sooner and they stated because he filed bankruptcy, but the bankruptcy was not filed until 2 years after the last contact. The person was very rude and now because the person is self-employed and they cannot garnish a check from him, they are trying to garnish my check on my job. I don't think that is fair because I am only a co-signor and I think that prior to garnishment after the bankruptcy case was dismissed they should have called me and tried to work out some arrangements. They have my information and I have been in the same place for over 5 years. Is their anything I can legally do to stop them from garnishing my check? I am afraid that I am going to lose my job because of th garnishment because I work in a financial environment and it does not look good.

You can write them a check for the amount, and/or see if you can write them a check for a lower amount if they will settle.

Remember they only have to actually deal and inform the actual debtor, who is suppose to keep you informed of what is happening.

But since they have a judgement, yes they can garnish your pay, they may freeze and take all of the money from your bank accounts also.

I don't think that is fair because I am only a co-signor and I think that prior to garnishment after the bankruptcy case was dismissed they should have called me and tried to work out some arrangements.

There is no think as "just" a co-signer. When you co-sign you agree to take full responsibility if the signer defaults. Yes, it would have been nice if did contact you, but from their perspective you both are deadbeats. You defaulted on the original loan and the car was repoed. You agree to a payment plan then defaulted on that.


Is their anything I can legally do to stop them from garnishing my check? I am afraid that I am going to lose my job because of th garnishment because I work in a financial environment and it does not look good.


Legally you cannot be fired due to a garnishment. And legally you can't stop the garnishment. They have a judgement, they can use that to garnish your salary. The only way to avoid it is to get them to agree to a lump sum settlement.

I'm always mystified by co-signers who say "all I did was sign" or "I'm just a co-signer"!

What did you think the purpose of asking you to SIGN and be RESPONSIBLE for the loan was.

Why would a lender do this?

It is not like you were put down on an application as a personal reference, or someone who might take a message for the borrower in the future, you AGREED to take on the responsibility to ACTUALLY PAY THE LOAN.

Now that you are in the exact situation that you agreed to by signing, you are seeking a way to get out of it.

Personally, I've never co-signed for anyone, and can't ever see myself doing so, the risk is far to great, besides, I don't know of anyone, friend or relative, other than my wife, that I would trust enough to be responsible for paying back what they have borrowed.

Pay in full, try to negotiate a settlement (probably not a very good option since they can get paid in full as long as you are working now) or let them garnish until the judgment is satisfied, or quit your job and hope that they can't find you at a new one.

Those are your available options at this point in time.