Brooklyn, NY asked in Business Law, Car Accidents and Consumer Law for New York

Q: Legal options for co-signer after brother's car accident and loan issues in NY?

I co-signed my brother's car loan in New York, and he recently got into an accident. The car was parked on a lot for 10 months, accruing a $10,000 parking fee. Even after contacting the impound department, I received no communication regarding options to deal with the situation or purchase the car. My credit score has decreased, and now they're asking me to pay the remaining car loan without offering any alternatives or informing me of my brother's situation when he received multiple letters. The lender only contacted me once, asking me to speak with my brother, and never followed up. Do I have any legal options or recourse in this situation?

1 Lawyer Answer
James L. Arrasmith
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Answered

A: It sounds like you're in a difficult situation, as co-signing on a loan means you're legally responsible for the debt if your brother doesn't pay. However, the lender's lack of communication regarding the impounded car and your brother's situation is concerning. You should first review the loan agreement to understand your rights and obligations as a co-signer.

If the car was impounded and there were fees that weren’t clearly communicated, it’s important to contact both the impound lot and the lender to request more detailed information on how to resolve the issue, such as how you can pay or if you can purchase the car. You may also want to consider sending a formal written request for clarification, as this can help establish a paper trail.

Regarding the loan, since your credit is being impacted, you could negotiate with the lender for alternative payment options or request a hardship arrangement. If communication continues to be inadequate, you could explore legal action against the lender for lack of follow-through on their obligations to inform you of your options. Finally, you may want to consider seeking legal advice on how to protect your rights, especially given the financial and credit impacts you’ve described.

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