[kermatlon]

My husband co-signed a car loan for my brother 2 years ago. My brother worked for my husband, until recently when my husband was forced to fire my brother, as he stopped showing up for work.

My brother stopped paying his car payments. As the co-signer, my husband started receiving calls from the car credit company. We have now paid 3 monthly payments so that our credit will not be damaged. My brother has let the insurance and registration go on this car as well. For now the car is parked in a garage and is not being driven. The car has an outstanding balance of $10K.

I have 3 specific questions:

Is there anyway for us to get off this loan?

Is it possible for us to sell the car and pay off the loan?

Is it possible for my brother to use the car as a trade in for something else (of which we would have COURSE not co-sign on!) so that we can be out of this situation entirely?

[ScottGem]

No, unless the lender let you off the hook which is unlikely, you are stuck.

If you are not on the car title, you can't sell it, but your brother can sign the title over to you.

Yes, he can sell it or trade it, depending on the value. Its possible that the value of the car is less than the loan balance, though.

If your brother is working or has assets, you can sue him for any losses you have for the loan.

If your brother is amenable, I would have him sign the title over to you so you can get rid of it.

[aleish]

The only way you will not be responsible for the loan is if the lender lets you off. This is unlikely. You can try to settle with them for a one-time payment at an amount less than the full balance, some lenders will do this but they have no obligation to do so.

Unfortunately you do not have a security interest in the car, and making the payments does not give you the right to take it. You must sue your brother, that is your only recourse.

The only way the car can be used as a trade-in is if the new car financing or other arrangements will pay off the lender. The lender would never release their lien otherwise. If you try to trade-in, a way of selling, a car when there is a lien, it will be discovered in a title search and the sale will be rejected by the buyer. Frankly, this is a pretty unlikely scenario anyway; if your brother needed a cosignor two years ago he would certainly need one now.

I know it's too late, but this is why co-signing a loan is a very risky proposition that should only be done when one fully understands the risks. Good luck!

[Fr_Chuck]

Not to preach too much but there is a reason they ask for a co-signer, it is because they don't expect the other person to pay the loan off, and they want someone else to pay the loan for them.

That is what a co-signer is, a person who will pay the loan if the other person does not.

So no they won't let you off, why should they , they want their money.

No you can't sell the car unless your name is on the title ( co-owners) not just co-signers.

And if he will sell the call or trade it in, or get a loan of his own, then you are off the hook.

If not, YOU will have to make the payments or it will go against your credit also.

So you are not stuck paying for his car, until he wants to pay for it, or he decides to sell it.