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If you cosigned for a car loan to help a friend, is there any way you can get out of the loan? My friend and I are no longer on speaking terms, and I don’t want to be responsible for this debt.


That old saying about no good deed going unpunished exists for a reason. Depending on whether your name is on the car's title, you could be somewhat out of luck if he stops making payments - or else really out of luck. Either way, you are responsible for making good on the loan, no matter how frosty the relationship between you and your one-time friend has become. The lender or its agent can demand payment from you and ding your credit and/or sue you if you don't come across.

Things might not be as bad if your name is on the title. If the person whose loan you cosigned stops paying, you probably are within your rights to repossess the car. Whether you want it is another question, of course, and if the reason that you and your friend fell out is that he or she is violent or borderline crazy, then repossessing the car might best be avoided.

If your name is not on the title, then you still have the option of suing your former friend. If you do, there is a good chance that a court will order the car to be sold and the proceeds divided among all of his or her creditors -- if things have reached that point, it could mean that there are plenty of those - so you may end up with a fraction of a sliver of bupkis, and you would still be on the hook for the balance of the original loan. At this point, your best bet is to hope that the person for whom you cosigned keeps making payments. If the loan goes into default, it could cost you a lot of money with nothing to show for it but a valuable lesson learned. 



-Conrad de Aenlle