Mount Airy, NC asked in Consumer Law for North Carolina

Q: I’m trying to refinance my car loan and the person that co-signed for me will not sign the release form

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1 Lawyer Answer
Lynn Ellen Coleman
Lynn Ellen Coleman
  • Licensed in North Carolina

A: Unfortunately, you cannot compel your co-borrower to cooperate with refinancing the car. I assume their name is also on the title. This means they own half of the car, and are equally liable for the loan payments. You also cannot compel them to sign any paperwork to sell the car if they do not want to. Your only option is to file an action for "partition", which is a long and involved process that is not easy to do without a lawyer and will be quite costly. The end result of a partition is that the car will be sold, the loan paid off, and the excess proceeds divided between you and the coborrower accourding to the findings of the court. Long story short, if you want to keep the car, you will have to keep the current financing. You will also not be able to trade in the car or sell it if the co borrower will not cooperate. You will have to drive it until it dies, take it to a junk yard and let the junkyard deal with the title issues. If it is wrecked, hopefully the insurance ill pay the loan off, but any excess money over the loan payoff will be paid by a check made out jointly to you and your co borrower, and you will not be able to cash the check without dealing with your co borrower. This is the reason why having a cosigned loan is often a huge problem that people do not think about when they urchase something on credit.

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