A year and a half ago I agreed to be the primary on a car lease for my son, couldn't just be cosigner because his credit was/is so bad. So he is the cosigner. He let his insurance lapse - unintentionally, and on that one day of lapsed wrecked the car to the tune of a minimum of $11,000 in damages to his car alone. He depended upon the car for work, and even though he was able to use mine in the evenings he wasn't able to put in the hours he needed, so for the past 5 months I've been making his car payment, his insurance, his fines, his storage of the car. Even though he now has a different job, I can't get him to make these payments himself and I'm going deeper into debt each month, having t use my credit cards for things I need. I was laid off from the job I had when I cosigned with him and I now make much less money.
I don't know what to do. I didn't know the insurance had lapsed until after the accident.
I had a bankruptcy that was discharged nine years ago. Can I declare bankruptcy for the damages on the car after I've paid off the lease and towed the car back to the dealership. Or should I just stop paying the lease? Please advise. Thank you.
Hi Kat
You seriously do have a situation I must say! After reading your post I tried to find some light in the tunnel and all I can see is any liability claim that your son might be able to make provided his car was in an accident with another car that has it's insurance in place and also it is the fault of the other driver. However, insurance related matters may be better answered here.
About the debt, I am afraid since you are the primary, you will have to pay.
You said you were making his insurance premium payments too and then you didn't have an idea that the insurance had lapsed. Kat, keep this in mind that no matter what you have to pay off your loan. Now if you stop paying your loan your car will be repossessed and will be sold off for whatever it is worth. The rest of the amount that you owe after the car is sold off must be paid off by you. I am sorry for the situation that you are in now but maybe bankruptcy isn't a very good idea. You could ask your creditor for a loan modification or come to an arrangement with him. Tell your creditor that you are on the verge of bankruptcy and cannot afford to pay him so much money. Ask him to come to a payment agreement with you and offer an amount you will be comfortable paying. Your creditor might not be willing for a settlement but hold your patience. Explain the situation to him politely. I am praying that thing will work out.
I hope your son has good sense in future and you don't have to get in to so much of trouble again. Let me know what's going on.
Kat,
I just wanted to add here that we once had a car repossed. It was a really mixed up ordeal and a long story but the short of the story is easier to explain. The bank turned around and sold our car for soo much less than its value. The original price was around $7,000 (years ago when cars were alot cheaper) and they sold it for under a thousand. We still had to pay back the rest of the money. So we were better off just keeping it since we mostly paid for it anyway and it would not have ruined our credit. Good Luck.
Yes Kat,
What firey has pointed out is also true. Your car may not be sold for a fair value. To find out how much your car may be worth (in the state that it is in right now) you may do a little research and find out its price now. You may visit the car body shops and they can help you with an estimate of your car's value. Then you may decide what to do with your car. Remember you have to pay the cost of repairing it if you keep the car and your insurance has lapsed.
Kat, Is there any possible way for your son to help pay this...even if it involved small claims court. I feel he should not let you be responsible for this error and although small claims court has limits (like up $5000) you could get him to pay at least that. Next try to sell off the car and with those combined monies it may be easier for you to handle the rest. I would really hate to see you ruin your credit for 10 eyars with a bankruptsy. Maybe getting him to take on some of the responsiblity for his errors will help him grow and mature.