Cosigning - cosigner won't pay and won't give any information or transfer asset
Is your name on the title at all? You may have (slightly) more leverage in that case, but co-signing any loans is not a good idea, even for a friend or relative. As this article notes: Generally, co-signing refers to financing, not ownership. If the   primary accountholder fails to make payments on the loan or the retail   installment sales contract (a type of auto financing dealers sell),   the co-signer is responsible for those payments, or their credit will   suffer. Even if the co-signer makes the payments, they’re still not   the owner if their name isn’t on the title. The Consumer Finance Protection Bureau (CFPB) notes: If you co-sign a loan, you are legally obligated to repay the loan in   full. Co-signing a loan does not mean serving as a character reference   for someone else.  When you co-sign, you promise to pay the loan yourself. It means that   you risk having to repay any missed payments immediately. If the   borrower defaults on the loan, the creditor can use the same   collection methods against you that can be used against the borrower   such as demanding that you repay the entire loan yourself, suing you,   and garnishing your wages or bank accounts after a judgment. Your   credit score(s) may be impacted by any late payments or defaults. Co-signing an auto loan does not mean you have any right to the   vehicle, it just means that you have agreed to become obligated to   repay the amount of the loan. So make sure you can afford to pay this   debt if the borrower cannot. Per this article and this loan.com article, options to remove your name from co-signing include: If you're name isn't on the title, you'll have to convince your ex-boyfriend and the bank to have you removed as the co-signer, but from your brief description above, it doesn't seem that your ex is going to be cooperative. Unfortunately, as the co-signer and guarantor of the loan, you're legally responsible for making the payments if he doesn't. Not making the payments could ruin your credit as well. One final option to consider is bankruptcy. Bankruptcy is a drastic option, and you'll have to weigh whether the disruption to your credit and financial life will be worth it versus repaying the balance of that auto loan. Per this post: Another not so pretty option is bankruptcy. This is an extreme route,   and in some instances may not even guarantee a name-removal from the   loan. Your best bet is to contact a lawyer or other source of legal help to review your options on how to proceed with this issue.
I know this question has a lot of answers already, but I feel the answers are phrased either strongly against, or mildly for, co-signing. What it amounts down to is that this is a personal choice. You cannot receive reliable information as to whether or not co-signing this loan is a good move due to lack of information. The person involved is going to know the person they would be co-signing for, and the people on this site will only have their own personal preferences of experiences to draw from. You know if they are reliable, if they will be able to pay off the loan without need for the banks to come after you.  This site can offer general theories, but I think it should be kept in mind that this is wholly a personal decision for the person involved, and them alone to make based on the facts that they know and we do not. In a nutshell, not really.  That's the risk you take when you co-sign for someone.  The lender only made the loan because of the strength of your brother's credit, not your mother's, so his reputation (in the form of his credit rating) is going to take the hit because of his mother's behaviors. The one thing he can do is this:  The credit bureaus allow you to add a comment or explanation to your credit file which may be helpful, provided potential creditors read it, which is never a guarantee.  It's worth trying though, so suggest to him to look into it. Here's a link for him/you/anyone to look at that can help explain how this works and what effects it can have: Adding a comment to your credit file for negative items I hope this helps. Good luck! It could be a couple of things besides extra principal: I seem to remember hearing that some (shady?) lenders would just pocket extra payments if you didn't specify where they were headed, but I've also been told that this just isn't true. Ok but if there's no money and nobody willing to lend, how are those payments made?   It's fine and dandy to have the theoretical obligation and willingness, but I'm wondering what happens when there's simply no more capability to borrow more.  Edit: Funny you say that, I'm moving in! "You say  Also I have been the only one with an income in our household for last 15 years, so for most of our marriage any debts have been in my name. She has a credit card (opened in 1999) that she has not used for years and she is also a secondary card holder on an American Express card and a MasterCard that are both in my name (she has not used the cards as we try to keep them only for emergencies). This would seem to indicate that the dealer is correct.  Your wife has no credit history.   You say that you paid off her student loans some years back.  If ""some years"" was more than seven, then they have dropped off her credit report.  If that's the most recent credit activity, then she effectively has none.   Even if you get past that, note that she also doesn't have any income, which makes her a lousy co-signer.  There's no real circumstance where you couldn't pay for the car but she could based on the historical data.  She would have to get a job first.  Since they had no information on her whatsoever, they probably didn't even get to that." I have recently been the lender to a couple people. It was substantially less money (~$3k), but I was trusting their good faith to pay me back. As a lender, I will never do it again. Reasons, Overall, not worth it. "Short answer: don't do it. Unless you know something that the bank doesn't, it's safe to assume that banks are a lot better at assessing risk than you are. If they think he can't afford it, odds are he can't afford it regardless of what he might say to the contrary. In this case, the best answer may be ""sorry for your luck;"" you could recommend that he comes up with a larger down payment to reduce his monthly payment (or that he find a way to get some extra income) rather than getting you to cosign. Please also see this article by Dave Ramsey on why you should never cosign loans." I don't think there's anything to worry about.  TFS doesn't really care who's paying, as long as the loan is being paid as agreed.  Of course you're helping your dad's credit history and not your own, but I doubt TFS would give back money just because it came from your bank account. A business may claim a payment wasn't made against the loan, but you'd have the records that you did in fact pay (keep those bank statements).  In theory they could sue you, in practice you'd send them the proof and they'd investigate and find the misplaced money.  THAT does happen sometimes; the wrong account is credited.  If it did end up in court, again you'd win because you have proof you sent payments.  Even if you put the wrong loan account number to pay to, you'd have proof you in fact sent the money.   If you're talking about something like a loan shark... they can do whatever they like.  They won't sue you though, because again you'd have proof.  That's why they'd use violence.  But probably a loan shark wouldn't falsely claim you didn't pay if you did, as word would get out and the loan shark would lose business.  And again, as long as they get what's agreed to, they don't care how they get it or who they get it from. "Obligatory ""Don't do it"" remarks: If the guy isn't trusted enough to even show up to work, and can't get a personal loan directly from a bank (Home Equity Line of Credit would suffice), this is really setting things up for failure. What if he quits? What if you need to fire him (you know, for not showing up for weeks)? </rant> In order to be able to place a lien on his home should he default on the loan, you'll need to draft up a loan agreement or promissory note stating specifically that you have the right to do so. Get a lawyer involved.  Here's an article that talks about setting up a Private Home Loan, which is geared more at helping someone buy a home, but may prove useful in this case as well: https://www.nolo.com/legal-encyclopedia/borrowing-from-family-friends-buy-29649.html It's pretty lengthy, so I won't quote it out here, but the gist of it is: Get everything in writing in a legally binding contract." Co-signing is not the same as owning. If your elderly lady didn't make any payments on the loan, and isn't on the ownership of the car, and there was no agreement that you would pay her anything, then you do not owe either her or her daughter any money. Also the loan is not affecting the daughter's credit, and the mother's credit is irrelevant (since she is dead). However you should be aware that the finance company will want to know about the demise of the mother, since they can no longer make a claim against her if you default. I would start by approaching the loan company, telling them about the mother's death, and asking to refinance in your name only. If you've really been keeping up the payments well this could be OK with them. If not I would find someone else who is prepared to co-sign a new loan with you, and still refinance. Then just tell the daughter that the loan her mother co-signed for has been discharged, and there is nothing for her to worry about. Maybe there's more to this story, because as written, your sister seems, well, a little irrational. Is it possible that the bank will try to cheat you and demand that you pay a loan again that you've already paid off? Or maybe not deliberately cheat you, but make a mistake and lose track of the fact that you paid? Sure, it's POSSIBLE. But if you're going to agonize about that, what about all the other possible ways that someone could cheat you? What if you go to a store, hand over your cash for the purchase, and then the clerk insists that you never gave him any cash? What if you buy a car and it turns out to be stolen? What if you buy insurance and when you have a claim the insurance company refuses to pay? What if someone you've never met or even heard of before suddenly claims that you are the father of her baby and demands child support? Etc etc. Realistically, banks are fanatical about record-keeping. Their business is pretty much all about record-keeping. Mistakes like this are very rare. And a big business like a bank is unlikely to blatantly cheat you. They can and do make millions of dollars legally. Why should they break the law and risk paying huge fines and going to prison for a few hundred dollars? They may give you a lousy deal, like charge you outrageous overdraft fees and pay piddling interest on your deposit, but they're not going to lie about how much you owe. They just don't. I suggest that you not live your life in fear of all the might-be's. Take reasonable steps to protect yourself and get on with it. Read contracts before you sign, even if the other person gets impatient while you sit there reading. ESPECIALLY if the other person insists that you sign without reading. When you pay off a loan, you should get a piece of paper from the bank saying the loan has been paid. Stuff this piece of paper in a filing cabinet and keep it for years and years. Get a copy of your credit report periodically and make sure that there are no errors on it, like incorrect loan balances. I check mine once every year or two. Some people advise checking it every couple of months. It all depends how nervous you are and how much time you want to spend on it. Then get on with your life. Has your sister had some bad experience with loans in the past? Or has she never borrowed money and she's just confused about how it works? That's why I wonder if there's more to the story, if there's some basis for her fears. "I think everything in your case is just simply missing one important rule of how credit works. Essentially, your MIL cannot get a loan. You can. You are making her a large loan that she cannot get for herself. That is all. That is the essence of what this deal is. It is not without interest - she makes a financial contribution toward your son, you get the deal in 2 years assuming she doesn't default (she will), etc. Imagine it this way: you are sitting in the dealership with the dealer and your MIL. She wants a loan to pay for the car. The dealership says, ""you are way not credit worthy."" So your MIL says, ""why doesn't my son-in-law take out the loan instead?"" Now the dealership says, sure, that's fine. From the dealer's standpoint, every other part of your arrangement is irrelevant - boring, even. The only magic trick is in who takes the loan out, no other difference. You're letting your MIL pull a car out of her sleeve like a magician, and in taking the deal you're believing her.  This sentence: I am pretty sure that the ex-MIL will not let me down (I've loaned her large sums of money before and she always promptly repaid).  is everything. You're making a rather large bet that the things that can go wrong in two years - including any situation involving your wife's welfare - are rather miniscule. And furthermore, that the few times she's paid you back - that did NOT convince banks and dealer she is more creditworthy - justifies her good creditworthiness. Is the interest worth it? Do you really believe that your MIL needs to wring a car out of you before she would consider contributing to her grandson's well-being (which is, essentially, the interest)? But wait, it's NOT everything. Her daughter (my ex-wife) would drive it for 2 years and then turn the car over to our son. Even if your MIL is creditworthy, the woman you described as follows: Her daughter, though, is a loose cannon. Will be holding and returning the collateral in this deal. Things she can do include: So I'm arguing two points: Obviously my opinion on this is clear. I hope I did a decent job of explaining where the components of this deal (credit, interest, collateral) play out in the eyes of a dealer or bank, and get lost in the mechanics of the rules you worked out with your family." "I don't think you've mentioned which State you're in. Here in Ontario, a person who is financially incapable can have their financial responsibility and authority removed, and assigned to a trustee. The trustee might be a responsible next of kin (as her ex, you would appear unsuitable: that being a potential conflict of interest); otherwise, it can be the Public Guardian and Trustee. It that happens, then the trustee handles the money; and handles/makes any contracts on behalf of (in the name of) the incapable person. The incapable person might have income (e.g. spousal support payments) and money (e.g. bank accounts), which the trustee can document in order to demonstrate credit-worthiness (or at least solvency). For the time being, the kids see it as an adventure, but I suspect, it will get old very fast. I hope you have a counsellor to talk with about your personal relationships (I've had or tried several and at least one has been extraordinarily helpful). You're not actually expressing a worry about the children being abused or neglected. :/ Is your motive (for asking) that you want her to have a place, so that the children will like it (being there) better? As long as your kids see it as an adventure, perhaps you can be happy for them. Perhaps (I don't know: depending on the people) too it's a good (or at least a better) thing that they are visiting with friends and relatives; and, a better conversational topic with those people might be how they show your children a good time (instead of your ex's money). One possible way I thought of co-signing is if a portion of child/spousal support goes directly to the landlord. I asked the Child Support Services (who deduct money from my paycheck monthly to pay support to my ex) and they told me that they are not authorized to do this. Perhaps (I don't know) there is some way to do that, if you have your ex's cooperation and a lawyer (and perhaps a judge). You haven't said what portions of your payments are for Child support, versus Spousal support (nor, who has custody, etc). If a large part of the support is for the children, then perhaps the children can rent the place. (/wild idea) Note that, in Ontario, there are two trusteeship decisions to make: 1) financial; and 2) personal care, which includes housing and medical. Someone can retain their own 'self-care' authority even if they're judged financially incapable (or vice versa if there's a personal-care or medical decision which they cannot understand). The technical language is, ""Mentally Incapable of Managing Property"" This term applies to a person who is unable to understand information that is relevant to    making a decision or is unable to appreciate the reasonably foreseeable consequences of a    decision or lack of decision about his or her property. Processes for certifying an    individual as being mentally incapable of managing property are prescribed in the SDA (Substitute Decisions Act), and in the Mental Health Act."" The Mental Heath Act is for medical emergencies (only); but Ontario has a Substitute Decisions Act as well. An intent of the law is to protect vulnerable people. People may also acquire and/or name their own trustee and/or guardian voluntarily: via a power of attorney, a living will, etc. I don't know: how about offering the landlord a year's rent in advance, or in trust? I guess that 1) a court order can determine/override/guarantee the way in which the child support payments are directed 2) it's easier to get that order/agreement if you and your ex cooperate 3) there are housing specialists in your neighborhood: They can buy housing instead of renting it. Or be given (gifted) housing to live in." "I really don't feel co-signing this loan is in the best interests of either of us.  Lets talk about the amount of money you need and perhaps I can assist you in another way. I would be honest and tell them it isn't a good deal for anybody, especially not me.  I would then offer an alternative ""loan"" of some amount of money to help them get financing on their own.  The key here is the ""loan"" I offer is really a gift and should it ever be returned I would be floored and overjoyed.  I wouldn't give more than I can afford to not have. Part of why I'd be honest to spread the good word about responsible money handling.  Co-signed loans (and many loans themselves) probably aren't good financial policy if not a life & death or emergency situation.  If they get mad at me it won't matter too much because they are family and that won't change." I am 17 and currently have a loan out for a car. My parents also have terrible credit, and because I knew this I was able to get around it. Your co-signer on your loan does not have to be your parent, at least in Wisconsin, I used my grandmother, who has excellent credit, as my cosigner. With my loan, we had made it so it doesn't hurt her credit if I don't get my payments in on time, maybe this is something for you to look into.