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Co-Signer Rights

What rights to the property does the co signer have?

What rights to the property does the co signer have?

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Highlights

  • A secured loan is tied to the item purchased with the borrowed money.
  • The title gives the borrower, lender, and co-signer the rights to the security.
  • The real question is, 'Does the co-signer's name appear of the title?'

A lender will require a borrower to find a willing co-signer if it is worried about the borrower's ability to repay a loan. The co-signer takes responsibility for repaying the loan if the primary borrower does not. If the lender cannot collect from the borrower, the co-signer must repay the loan plus late fees, interest, or other charges the lender adds.

Loans are secured or unsecured. A secured loan is tied to the item purchased with the borrowed money, customarily. In the legal trade, the item in question is referred to as the security. Vehicle loans and property mortgages are common examples of secured loans. A credit card is a common example of an unsecured loan.

A vehicle or house may be purchased with borrowed money, but it is not the loan that gives the borrower or lender the right to possess the security. A title determines who has ownership rights to the vehicle or home.

For a vehicle purchased with a loan, the title will list the name of the lender. If the borrower defaults on the loan, the title (among other legal documents) will give the lender the right to repossess the vehicle. If a vehicle contains only the name of the primary borrower and the lender, then the co-signer (if any) has no rights to the vehicle. If the co-signer is listed on the vehicle's title, then he or she has the legal right to possess the vehicle.

For real property, the concept is the same as a vehicle loan, but details differ. However, the central point is the same — if the co-signer is listed on a real property's title, then he or she has some interest in that property. Rights to a property can be complex, and take half a semester to teach in law school, so it is beyond the scope of this answer to discuss an owner's possible rights to a property.

Your Question About Co-Signer Rights

You asked what rights a co-signer has to a security. The real question is, "Does the co-signer's name appear of the title?" If yes, then the co-signer has a right to the security. If the co-signer's name does not appear on the title, then the co-signer has no right to the security.

I hope this information helps you Find. Learn & Save.

Best,

Bill

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92 Comments

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  • MS
    Nov, 2017
    Martha

    I am cosigner of my ex fiance vehicle. He refused to take my name off. So we made an agreement that he is to pay the vehicle on or before due date no later and i would not be bothered by anything to do with the vehicle and if he failed to pay as him and i agreed i would take the vehicle and turn it in. I recently found out in july he did not pay the truck. He has paid double payments to pay up to what it should be. His new girlfriend stated to me they do not care about my credit. So can i still take the truck? I know he paid up but we did agree thru text so is that considered breach of agreement or do i still continue to let him have the truck? Do i have the right to take possession of the vehicle since he paid up and the finance comp is a crock as well. Just an fyi do not finance thru westlake financial horrible comp. Even allow him to alter my account that i have set up with my own personal e mail. As well as allow him to have people all pretending to be. Ask the finance comp bout it now and they have no idea wont even say if someone is using my name they keep it hush hush cuz primary told em to.

    0 Votes

    • 35x35
      Nov, 2017
      Betsalel

      If you are a co-signer then you have a legal obligation to make the payments. Any agreement you have with the other borrower is between the two of you and the finance company is not a part of the agreement. If you have any legal questions then you should contact a local attorney.

      0 Votes

  • SB
    Jul, 2017
    SJ

    If a person co signs on a car, has it towed, removes the stereo equipment, gives it away/throws it away, are they responsible for reimbursing other signer? Payments have been late but never been behind.

    0 Votes

    • 35x35
      Aug, 2017
      Daniel

      There are different sets of responsibilities in play. As far as the finance company is concerned, both parties are responsible for the payments continuing to be made. As to whether one of the borrowers is acting in good faith, that depends on the agreement the two of them made.

      It is not clear why the person had the car towed and stereo removed. To recover money he or she did not expect to put out? A full telling of the facts to a lawyer may yield a more complete answer. 

      0 Votes

  • BD
    Jul, 2015
    B

    I co-signed on a car for my ex, but now we don't even talk. She keeps the payments at least a month behind at all times and has caused my credit score to drop 100+ points. I'm not sure if my name is on the title, and I can't get the information from her. What can I do?

    0 Votes

    • 35x35
      Jul, 2015
      Daniel

      As a co-signer, you should be able to get information about the status of the loan and who is listed on the title.

      Unfortunately, when you co-signed, you assumed full financial responsibility for the debt. Though your credit is taking a beating, it is fortunate that she is making payments, even if at a slower than desired rate. Were she to cease making payments and the car would be repossessed then you would be on the hook for whatever still is owed after the car is auctioned off and the proceeds applied to the remaining balance and the fees that are charged.

      I think that all you can do is to hope she keeps paying, monitor the status of the loan, check to see who is listed on title, and learn never to co-sign for anyone again.

      0 Votes

  • DK
    Jun, 2014
    Devi
    Burlington, NC
    My husbands friend co-signed for my husbands car as he doesnt have enough credit. My husband paid every premiums and paid off the loan for the car. His friend doesnt spend even a single penny for the car he just co-signed for it thats all. But his friends name is also included in the title. How to take his name out of the title. we need the title only in my husbands name
    0 Votes

    • BA
      Jun, 2014
      Bill
      There should be no problem transferring title, if your husband's friend agrees. Contact your state's DMV to get the proper form.
      0 Votes

  • MW
    Jun, 2014
    Michelle
    Miami, FL
    Hi, thanks for reading and I apologize for the convoluted story. I agreed to become co-signer for a car lease in FL for my fiance following his bankruptcy, to help my future husband build credit. 7 months later he broke off the engagement and agreed verbally to remove my name from the loan. He owed me several thousands of dollars, most of which he paid back (at 0% interest after several years), with the exception of $1000. We agreed I would return my engagement ring to the jeweler to sell, and I'd take my part of the money once the ring sold and refund him the rest of what he paid for it- anything extra would be kept by the jeweler who'd sold him the ring at less than cost due to her association with me. For 3 months, he came up with excuses and stated it was impossible to remove someone's name from a loan, until I got the loan rep, he and I on the phone, to explain his 3 options to do so. He said he'd pick one. I followed up with him several times and he texted that none of those options worked and he now refused to remove me from the loan. I replied that for every month following his initial promise to remove himself, I would deduct $100 for the service of being his cosignor and would wait to return his money as a guarantee to pay any fees if he skipped a payment until lease ended. The ring has sold and I will be getting the funds in a week. Can I deduct these $100/mo although this was a verbal discussion with no paperwork involved? I still remain cosigner. Thx.
    0 Votes

    • BA
      Jun, 2014
      Bill
      The law sees spoken and written contracts as the same. The difficulty with a spoken contract is proving what was said and what the parties agreed to. That's why the cliche, "Get it in writing" is so popular.

      Consider depositing the money from the ring's sale into a separate savings account in your name. Explain you will release the funds owed your ex-fiance when he refinances the vehicle in his name.
      0 Votes

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