What happens to the cosigner of a car if the person whom they co-signed for totals the car the car was worth less than what they still owed and the title is in cosigner's name?

Answer

If the person that totals-out the car doesn't pay the amount owed, then the co-signer is held liable for the remaining balance due on the car. If the co-signer says "the heck with paying it," then your credit report could be affected for up to 7 yrs. or the co-signer could be sued by whomever the co-signer owes or both. The co-signer may then turn-around and be able to sue to recover their costs/expenses from the person that they co-signed for, depending upon the agreement signed at the time. Also, if their was another insured vehicle involved in the accident, and the other driver was at fault, then the other driver's insurance pays the co-signer since the title is in the co-signer's name, and the totaled car was insured, if required by state. If other car was uninsured, then you can sue the uninsured driver for the loss. Different laws for different states.

First answer by Timbo6108. Last edit by Timbo6108. Contributor trust: 541 [recommend contributor]. Question popularity: 12 [recommend question]