Q: Hi all, I am trying to sell my car and I have someone who wants to take over payements. Is this method safe?
She says that it cannot hurt my credit if she misses a payment under the indemnity clause and that it is totally safe to me. Just wondering if this is true and what paperwork I’d need to do.
A: Even if you sell the car, you still have a direct contract with the lender to make the payments on the car. That doesn't change even if the purchaser agrees to make the payments. If they fail to make the payments, the lender can still report a default and pursue you for the balance. You would then have to sue her for whatever amounts you pay to the lender after the sale. Unless the lender is willing to do a new loan with her as the borrower or she gets a loan on her own to pay off the old lender and release you (which is unlikely and they have no obligation to do so), you cannot change your responsibility to make payments.
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