If I co-signed on my son’s car loan but he is no longer making the payments, what is my right to take the car from him?

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If I co-signed on my son’s car loan but he is no longer making the payments, what is my right to take the car from him?

 We have had to made the last 3 months payments. He is 19 years old.

Asked on July 13, 2011 under Bankruptcy Law, Iowa

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

You have *no* right to take the car from him: co-signing a loan (or even paying a loan entirely for someone else) does not, by itself, convey any rights to the vehicle; all cosigning does is obligate you to make payments--it does not give you an ownerhip interest of any kind.

You are in a bad position: you don't have a right to the car, but you have to keep making payments lest you be sued (by the lender, for payment) and/or have your own credit damaged for defaulting. You may be able to sue your son to force him to pay his share, but even aside from the fact that you'd have to sue your son (if he doesn't pay voluntarily) and may not wish to do, bringing a lawsuit can itself be an expesive proposition.

Possibly you can work something out whereby you son will sell the car to you in exchange for you refinancing it so he is no longer obligated on the loan; that may be the best outcome, since then the car is yours to use, sell, etc. You might be able to use the possibility of a lawsuit as leverage.


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