Q: How can I remove myself as co-signer from a car loan in Canada?
I co-signed a car loan in Canada three years ago for a relative who needed help to get a car. The car loan appears on my credit as though I am jointly liable. I discussed options with the bank to get my name off the loan, such as paying off the car, selling it, or having my relative refinance under his name, but he refuses these options. The payments are current, but having this loan impacts my debt-to-income ratio as I approach a mortgage renewal. Without a copy of the loan contract and having not yet consulted a lawyer, what steps can I take to remove myself from this liability and what legal implications might there be?
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A:
Removing yourself as a co-signer from a car loan in Canada can be tricky, especially if your relative is unwilling to refinance or pay off the loan. The first step you should take is to review the terms of the loan agreement. Without a copy of the contract, it might be difficult to fully understand your legal obligations and the exact process for removing your name. You can request a copy of the agreement from the lender to better understand your rights.
One option to consider is negotiating with the lender directly. Some banks might be open to removing you as a co-signer if the loan has a strong payment history and your relative's credit has improved. However, this is typically easier to achieve if your relative can refinance the loan solely in their name. If refinancing is off the table, you could try explaining the situation and ask the lender if there are any alternatives available.
From a legal standpoint, if your relative refuses to refinance or find another solution, you're left with limited options. Without your relative's cooperation, you may be stuck with the liability until the loan is paid off. It’s important to consult with a lawyer to fully understand the legal implications, especially if your credit is being affected. A lawyer can help you explore potential solutions and protect your financial interests.
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