If the co-signer on my car loan dies, can the family take the car from me like they're threatening to?
It looks to me like this is a 'call an attorney' situation, which is always a good idea in situations like this (family legal disputes).  But, some information. First off, if your family is going to take the car, you certainly won't need to make payments on it any more at that point, in my opinion.  If the will goes through probate (which is the only way they'd really be able to take it), the probate judge should either leave you with the car and the payments, or neither (presumably requiring the family to pay off the loan and settle your interest in the car).  Since the car has negative net value, it seems unlikely that the probate judge would take the car away from you, but who knows.  Either way, if they do take the car away from you, they'll be doing you a service: you have a $6,000 car that you owe $12,000 on.  Let them, and walk away and buy another car for $6,000. Second, I'm not sure they would be allowed to in any event.  See the Illinois DMV page on correcting titles in the case of a deceased owner; Illinois I believe is a joint tenancy state, meaning that once one owner dies, the other just gets the car (and the loan, though the loan documents would cover that).  Unless you had an explicit agreement with your grandfather, anyway. From that page: Joint Ownership A title in the names of two or more persons is considered to be in joint tenancy. Upon the death of one of them, the surviving joint tenant(s) becomes the owner(s) of the vehicle by law. Third, your grandfather can fix all of this fairly easily by mentioning the disposition of the car and loan in his will, if he's still mentally competent and wishes to do so.  If he transfers his ownership of the car to you in the will, it seems like that would be that (though again, it's not clear that the ownership wouldn't just be yours anyway). Finally, I am not a lawyer, and I am not your lawyer, so do not construe any of the text of this post as legal advice; contact a lawyer. If you've been paying on the car for three years, it's possible that your credit is in a place where you don't need a co-signer any more. See if your bank will re-fi with you as the sole debtor.  If they won't do it, find another institution who will.  The re-fi will take your grandpa off the loan, and whichever institution that does the re-fi will still have a lien on the title until you pay it off.  Then, if you can do this soon enough, figure out if grandpa can sign you off the title. You're driving a car worth about $6000 which has a $12,000 loan against it. You're driving around in a nett debt of $6000. The best thing your grandfather could do for you, if possible, is to take your name off both the title and the loan, refinancing the car in his name only. If possible while still letting you drive the car. When he dies, you will be out of a car, but also out of a $12,000 debt which I'm sure you could do without. Okay, the best thing your grandfather could do, from your wallet's point of view, is paying off the loan for you and then taking his name off the title. My grandmother passed away earlier this year. When I got my car 3 years ago, I did not have good enough credit to do it on my own or have her as a co-signer. We had arranged so that my grandmother was buying the car and I was co-signing.  A similar situation was happening and I went to my bank and took out a re-finance loan prior to her passing. I explained to them that my grandmother was sick and on her death bed. They never once requested a power of attorney or required her signature. I am now the sole owner of the vehicle. I think Joe is right, it seems that you will get the car once grandpa passes.  It clearly states that on the DMV page. I would work like crazy to get this car paid off ASAP.  Work extra and see if you can get it paid off in less than a year.  Once paid off, have grandpa sign it over to you.   This is a really toxic situation that you can reduce somewhat by having the car in your name only.  Learn from this:  have a will and keep it up to date.  There is going to be a lot of fighting over the assets that grandpa leaves behind.  You don't want that to be your legacy, and you don't want to tarnish your grandfathers memory by participating in such nonsense. My concern is why you have such poor credit.  Understand that poor credit is a choice of behavior and there is no one to blame but yourself.  I would recommend to stop borrowing completely until this car is paid off and all of your obligations are paid back (that is if you have items that are in collections).  No vacations, no eating out, etc... Work don't spend. "I was in a similar situation about a year ago, and the expedient thing to do would be to remove your grandfather from the Title.  He would probably have to agree with this, but I think he will if you approach it correctly. In my case, I was the cosigner for my son's car loan and was told by the dealer that I ""had to be on the title"".  This is not true as far as Virginia is concerned (Illinois may be different).  I know this because when my son dropped his auto insurance I got the fine for having an uninsured vehicle and was told during the hearing that the dealer was mistaken. It all worked out in the end, but all we had to do was go down to the DMV and get my name taken off of the title. I'm sure if you approach it this way - you do not want him to be responsible for things that you do (who would get sued if you caused an accident?) he would agree to have his name removed from the title." "The lead story here is you owe $12,000 on a car worth $6000!!  That is an appalling situation and worth a lot to get out of it.  ($6000, or a great deal more if the car is out of warranty and you are at risk of a major repair too.)  I'm sorry if it feels like the payments you've made so far are wasted; often the numbers do work out like this, and you did get use of the car for that time period. Now comes an ""adversary"", who is threatening to snatch the car away from you.  I have to imagine they are emotionally motivated.  How convenient :) Let them take it.  But it's important to fully understand their motivations here.  Because financially speaking, the smart play is to manage the situation so they take the car. Preferably unbeknownst that the car is upside down.  Whatever their motivation is, give them enough of a fight; keep them wrapped up in emotions while your eye is on the numbers.  Let them win the battle; you win the war: make sure the legal details put you in the clear of it.  Ideally, do this with consent with the grandfather ""in response to his direct family's wishes"", but keep up the theater of being really mad about it.  Don't tell anyone for 7 years, until the statute of limitations has passed and you can't be sued for it. Eventually they'll figure out they took a $6000 loss taking the car from  you, and want to talk with you about that.  Stay with blind rage at how they took my car.  If they try to explain what ""upside down"" is, feign ignorance and get even madder, say they're lying and they won, why don't they let it go?  If they ask for money, say they're swindling. ""You forced me, I didn't have a choice"".  (which happens to be a good defense.  They wanted it so bad; they shoulda done their homework.  Since they were coercive it's not your job to disclose, nor your job to even know.)  If they want you to take the car back, say ""can't, you forced me to buy another and I have to make payments on that one now.""" My family members, particularly my aunt (his daughter), are telling me that when my grandpa dies they are taking my car. Bring this up with Grandpa.  If this is what he wants to have happen, then help him make it happen before you finish paying $12,000 on a car worth only $6,000.  Let the Aunt and other relatives deal with the remaining $12,000. If that isn't what he wants to have happen, then work out how you and he can legally make sure that what he wants to have happen actually happens. If the Aunt or others bring it up, make sure they understand that you still owe $12,000 on the car, and if they get the car they also get the loan.  If they refuse to pay the loan then make sure they know you will cooperate with the bank when they attempt to repossess the car - up to and including providing them with keys and location. This will hurt your credit, and you will be on the hook for the remaining portion of the loan, but you at least won't have to deal with all of it - they'll sell it at auction and your loan amount will fall a little. But the best course of action is to work with Grandpa, and make sure that he understands the family's threats, how that will affect you since you're on the loan, and what options you'd like to pursue. Possession is 9/10 of the law, and any agreement between you and your grandfather is covered under the uniform commercial code covering contracts.  As long as your fulfilling your obligation of making payments, the contract stands as originally agreed upon between you and the lender.  In short, the car is yours until you miss payments, sell it, or it gets totalled.  The fact that your upside down on value to debt isn't that big of a deal as long as you have insurance that is covering what is owed.
"I am not sure how anyone is answering this unless they know what the loan was for.  For instance if it is for a house you can put a lien on the house.  If it is for the car in most states you can take over ownership of it.   Point being is that you need to go after the asset.   If there is no asset you need to go after you ""friend"".  Again we need more specifics to determine the best course of action which could range from you suing and garnishing wages from your friend to going to small claims court.  Part of this process is also getting a hold of the lending institution.  By letting them know what is going on they may be able to help you - they are good at tracking people down for free. Also the lender may be able to give you options.  For example if it is for a car a bank may help you clear this out if you get the car back plus penalty.  If a car is not in the red on the loan and it is in good condition the bank turns a profit on the default.  If they can recover it for free they will be willing to work with you.  I worked in repo when younger and on more than a few occasions we had the cosigner helping.  It went down like this... Co-signer gets pissed like you and calls bank, bank works out a plan and tells cosigner to default, cosigner defaults, banks gives cosigner rights to repo vehicle, cosigner helps or actually repos vehicle, bank gets car back, bank inspects car, bank asks cosigner for X amount (sometimes nothing but not usually), cosigner pays X, bank does not hit cosigners credit, bank releases loan and sells car.  I am writing this like it is easy but it really requires that asset is still in good condition, that cosigner can get to the asset, and that the ""friend"" still is around and trusts cosigner.  I have seen more than a few cosigners promise to deliver and come up short and couple conspiring with the ""friend"".   I basically think most of the advice you have gotten so far is crap and you haven't provided enough info to give perfect advice.  Seeking a lawyer is a joke.  Going after a fleeing party could eat up 40-50 billable hours.  It isn't like you are suing a business or something.  The lawyer could cost as much as repaying the loan - and most lawyers will act like it is a snap of their fingers until they have bled you dry - just really unsound advice. For the most part I would suggest talking to the bank and defaulting but again need 100% of the details.   The other part is cosigning the loan.  Why the hell would you cosign a loan for a friend?  Most parents won't cosign a loan for their own kids.  And if you are cosigning a loan, you write up a simple contract and make the non-payment penalties extremely costly for your friend.  I have seen simple contracts that include 30% interests rates that were upheld by courts." It's perfectly legal for your brother to make a loan to you.  However those two transactions are separate.  If he defaults on the LC loan because you didn't pay him, it's his responsibility.  If you default on your loan with him, you've got big problems.  Money + family/friends = scary. It is possible for him to get a loan against the house as long as the deeding all takes place at the same time as the loan is closing. Basically you and your brother will both have paperwork to sign, and the title company will not send out checks until the loan funds from the mortgage company. For that deeding to take place, the estate will generally have to be fully settled. That can take time, but you might wish to retain a lawyer to be certain your interests are completely protected. Many people feel like getting legal representation will strain family relationships, but I find the opposite to be true. They often grease the wheels and get the process finished quickly and fairly which ultimately reduces such strain. I would view it as a good sign if he is paying off large debts, because that means he will be in a better position to take a mortgage to pay you your share, but that assumes he is acting in good faith. "I'll take an alternate route: honesty + humor. Say something like this with a smile and a laugh, like you know they're crazy, but they maybe don't know it yet. ""Are you crazy? Co-signing a loan can put us both in a lot of potential danger. First, you shouldn't get a loan that you can't afford/attain on your own, and second, I'd be crazy to agree to be liable for a loan that someone else can't get on their own. You want something bad enough, you get your credit rating in order, or you save up the money - that's how I bought (my car/house/trip to Geneva). I'd be happy to point you in the right direction if you want to put a plan together."" You're offering help, but not the kind that puts you in danger. Declining to co-sign a loan can't damage your relationship with this person as much as failure to pay will." Your first step is to talk to the current lender and ask about refinancing in the other person's name. The lender is free to say no, and if they think the other person is unlikely to pay it back, they won't refinance. If you're in this situation because the other person didn't qualify for a loan in the first place, the lender probably won't change their mind, but it's still worth asking. From the lender's point of view, you'll be selling the other person the car.  If they qualify for a loan, it's as simple as getting the loan from a bank, then doing whatever is required by your state to sell a car between either private parties or between relatives (depending on who the other person is). The bank might help you with this, or your state's DMV website.  Here are a few options that don't involve changing who is on the loan: Taking out a loan for another person is always a big risk. Banks have entire departments devoted to determining who is a good credit risk, and who isn't, so if a person can't get a loan from a bank, it's usually for a good reason.  One good thing about your situation: you actually bought the car, and are the listed owner. Had you co-signed on a loan in the other person's name, you'd owe the money, but wouldn't even have the car's value to fall back on when they stopped paying. Trying to forcefully reclaim the money will ruin the relationship.  In general it's bad practice to loan money to family. If I am the guarantor for someone else's loan, can my personal property be possessed if the other person doesn't pay back the loan? As you have not indicated jurisdiction / country ... laws vary. In general; Yes. Your personal property can be possessed. However the financial institution has to send notices, get a court order and then possess your property and auction it. They can also freeze your Bank Account, or any other assets you have. There is no restriction as you have given a blanket guarantee. Note depending on Jurisdictions your estate and or legal heirs can also be liable to this if you die during the course of loan. can my property be mortgaged as a guarantee to his loan? Depending on how this is worded in legal contract, you can mortgage your property ONLY as a guarantee to his loan. In such cases financial institution can only take your property, but cannot take any other assets such as Bank deposits etc. "Your arrangements with the bank are irrelevant. Whoever is named on the title of the vehicle owns it. If she is the ""primary"", then I assume her name is on the title, therefore she owns the car. If you drive off with the car and it is titled in her name, she can report it stolen and have you arrested for grand theft auto unless you have a dated and signed permission in writing from her to use the car. Point #2: If a car loan was involved, then you didn't ""purchase"" the car, the bank did. If you want to gain ownership of the car, then you need to have her name removed from the title and have yours put in its place. Since the bank has possession of the title, this will require the cooperation of both your girlfriend and the bank." "My personal rule is to not loan money (or co-sign) for any amount that I am not willing to give away.  It can go wrong in so many ways, and having a family or friend involved means making a ""business"" decision is difficult. If a bank won't loan the person the money, why should I?  Being a co-signer is the same as borrowing the money in my name and giving it right over to the borrower. There might be great reasons to do it.  I would probably sign a loan to keep my family alive or healthy, but no other reason.  There are many ways to help without signing a loan.  Give a room and a place to live, loan a car. The other thing is if you really truly believe in the borrower, it won't do long term damage to your credit or your financial goals, and you are the only resort; go ahead.  I am thinking about helping a teenager afford their first car or student loans." California bankruptcy law requires disclosure of any gift made by the person declaring bankruptcy in the past 12 months, and any asset transfers in the past 2 years (with a couple of minor exceptions). This would most certainly include the car, if it is regifted back to you. Such a claim would likely be considered fraudulent, though this would be a matter for the lawyers and bankruptcy trustee in question. There's a blog which you may wish to check out, the California Bankruptcy Blog, which has a specific entry on gifts. Now, there is a specific exemption for automobiles, but only up to a total of $2725. Legally, I believe there's nothing you can do here. If the $10K was a loan, it will be discharged in bankruptcy. If it was a gift, it'll have to be declared and the car will have to be sold. If regifted or transferred, it must be declared and will likely (but not definitely) be determined as an invalid disposal of assets. Either you or your family member will have to discuss this with a bankruptcy lawyer. I'm sorry your generous act is likely to get tangled up here. :( "I can answer this question for my jurisdiction (Florida, USA), because I lived through it. My Dad (""Alice"") passed away in 2008, just as the housing crisis was starting to heat up. What happened to the Mortgage? My Dad had a will in place.  It was an old will (from the 1980's), but never-the-less, a will.  We had to provide paperwork to the court that my Mom had already passed away, and my oldest brother was living out-of-state (he would have been the executor, otherwise).  With the proper paperwork, I became the Executor, and the property passed in to probate.  At this point, the ""Estate"" was responsible for the house and the mortgage on it (meaning me, as I was the Executor). We decided to sell the house, so we hired a realtor, and set an asking price about $40k over what was owed on it.  As we waited for it to sell, I had to make monthly mortgage payments, and payments to the HOA (otherwise the HOA could put a lien on the property, making it more difficult to sell, should we find a buyer). Is it Automatically Transferred? In most jurisdictions, I would say not ""automatic"".  I definitely had get an estate lawyer and file the proper legal paperwork with the local county courthouse.  Some states have an easier probate process (""Summary Administration"" in Florida), that eases the requirements for small estates. Is Bob expected to pay it off all at once? No, the mortgage holder was happy for me to make payments (out of other estate assets) in lieu of my Dad.  The were earning interest, after all.  This is probably true in most cases. Can the House be Foreclosed on? Yes.  In our case, being 2008, we had a hard time selling the property.  The asking price quickly went from $40k over what was owed, to $20k over, to $10k over, then to being equal to the mortgage value.  Finally, I approached the bank about options.  They suggested a ""Deed in Lieu of Foreclosure"" process.  It was easier for us, and the bank had to pay less lawyers and such.  Otherwise, a ""Deed in Lieu"" is effectively the same as a Foreclosure.  At that point, we stopped making payments.  Eventually, me and all my siblings (the ""heirs"") had to sign the proper paperwork giving the house over to the bank. In our case, the bank did not pursue us (or rather, the Estate) for the difference between final (auction) sale price and the mortgage balance (it was an FHA loan, so the US Government wound up picking up the difference).  From what I understand, this could have happened, and we would have wound up with basically nothing out of the Estate. Can the Lender Force the Sale? I can't give a definite answer on this, but it probably depends.  If you don't pay?  Yes they sure can--it's usually part of the standard mortgage contract!  I see 2 other options:" Sorry, but I think you really do need an attorney here. This is the kind of minefield where knowing all the precedents and edge cases can make a huge difference in what you can or can't do, and a misplaced comma can make or break your case. Note that AT BEST you could sell your own interest in the house -- owning the note does not mean owning the property, it only means that they issued the note on the strength of your share of the property. And a half-interest in a single family house has little value outside the family, except to sell it to whoever owns the other half. Which is probably the best answer: Sell your half to your Aunt, if she can afford to buy it. She then gets sole control of the house, and you get the money you seem to need right now, and everyone in the family is much less stressed. "The wording of this question is very confusing because ""primary signer"" would, in ordinary parlance, mean the person borrowing the money and the co-signer (not consigner) would mean the one who is guaranteeing the repayment of the loan: if the borrower does not pay, the co-signer is liable for making the payments. Whose name is on the title of the car? Who borrowed the money to buy the car? Is the loan in your name and your son co-signed the loan to induce the bank to loan you money to purchase the car, or is it the other way around, that your son borrowed the money and you co-signed the loan in order to induce the bank to loan your son the money? If the car title and the loan are in your name, are you defaulting on the loan and so your son is making the loan payments that should have come from you? Or is it that your son borrowed the money to buy the car, his name is on the title, he is making the payments, and you are no longer interested in backing him up in case he defaults and the bank comes after you for the money?" "fair enough, but I wasn't sure if you actually get it or not because your question seemed to revolved around cash and transaction value.  You are really just said ""skewing"" is if you didn't add net debt the multiple wouldn't be a valid muliptle. If you understand it, why start out with this mental exercise of saying ""we shouldn't calculate multiples wrong, because then they would be wrong""?" "Not all of the reason to start an LLC is liability (although that is implicit). There are two main reasons as far as I have experienced it: I always recommend that people set things up properly from the beginning.  If you do start to grow, or if you need to cut your losses, it can be very difficult to separate yourself from the company if it isn't set up entirely apart from you. I was once told, ""Run your small company as you would wish it to be.""  Don't get into bad habits at the beginning.  They become bad habits in big companies later on."