What are my rights/responsibilities for an auto loan that I co-signed for?

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What are my rights/responsibilities for an auto loan that I co-signed for?

I took out an auto loan for a boyfriend that I am no longer involved with. When we split up we made a written agreement that he would continue to drive the car as long as he made the payments and paid for the insurance. He recently called me and said that he wants to return the vehicle to me and stop paying for it. If he returns the car can I sue him for the difference in the value of the car and the auto loan? Also, if he continues driving the car and is in an accident or causes injury to someone while he is driving the car will I be liable?

Asked on August 28, 2010 under Bankruptcy Law, Wisconsin

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

1) First, if you are an owner of the car (i.e. on title), then yes, you could be responsible for any accidents, including personal injury, property damage, etc. If you are an owner, you MUST make sure there is adequate insurance coverage.

2) If you are not an owner, but only cosigned a loan, then you would probably not be responsible for accidents, though you should have the  documentation relating to the car reviewed by an attorney to make sure.

3) If the ex-boyfriend stops paying on the car, you would have grounds to sue him possibly either (a) his continuing contribution for the auto payments (but then presumably he'd have grounds/right to keep using the car, at least as much you do), or (b) the difference in value between car and loan, as you indicate. You should consult with an attorney to evaluate your exact recourse.

4) If the ex-boyfriend stops paying the loan, you'll need to pay it (while determing what your rights are); otherwise, the car could be repossessed.


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