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Seeking help for my mom... she's stuck and getting harrassed


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I'm sorry if this is in the wrong place, please move if needed.

My brother asked my mom to co-sign on a car loan. She realizes this was a huge mistake, and lesson learned, but it turned into a huge mess and I really feel bad for her.

I don't even know if this is legal, but she signed the papers (on the lines where my brother said she should) in her home. He took the papers back to the dealer.

We thought right from the start that she wasn't just the co-signer, that she was on the front-end of the loan and HE was the co-signer because the initial bills went to HER house, not his house.

My mom's income at the time was around $1100/month. The car payment was nearly $700/month. Her credit was around 780, she was never late with anything! How is it even possible to get a car loan with that income? My brother's income was probably about 3k/month and his credit isn't even on the chart. :roll: Under 500 for sure, if that's possible.

Anyway, he defaulted and the car got repossessed.

Of course they're after my mom about it. I know that if she was the co-signer, they'd go after her, but either way, it wasn't fair how it happened and she should've never been on the front end of that loan. Also, I thought you actually had to be there when you get a loan... you know, in person??

She's gotten NO paperwork about this, at all (except the first couple monthly bills before the address was switched to my brother's). This car was repoed, sold at auction, then the remaining balance was sold to a collection agency and she's gotten nothing about it until it was sold.

Now she gets phone calls every single day and they leave messages all the time. I told her to keep a log of all the calls and she has and it's a mile long. She said she's told them on the phone she wants the bill in black n white sent to her house and they didn't. They just keep calling.

I really don't know what to tell her to do at this point.

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Well, consulting an attorney would be a good idea, but I realize that may not be financially possible. Except: have you looked into Legal Aid, if she's low-income she may qualify.

Send the CA a DV letter, by certified mail, and ask that no further phone contact be made. That should stop the calls. If not, then consult a consumer lawyer, as she may be able to collect money from the CA for violations of consumer laws.

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Although - this Attachment is from Illinois it may help".

I would argue and establish your Mom as co-signer.


See: http://www.illinoislegaladvocate.org/index.cfm?fuseaction=home.dsp_Content&contentID=295

Differences Between Co-Signors and Guarantors

Commercial Code

The term co-signer is a generic term, and has no definition in the UCC. The UCC uses the term "accommodation party," as one who "signs the instrument for the purpose of incurring liability . . . without being a direct beneficiary of the value given for the instrument."

A "guarantor" is a particular kind of accommodation party – one who adds words of guaranty to the signature, indicating unambiguously that the party is guaranteeing collection rather than payment of another’s obligation. (810 ILCS 5/3-419d)

Under the UCC, an accommodation party can be primarily liable for the debt, unless they sign as a "guarantor", in which case their obligation is secondary. (810 ILCS 5/3-419e)


In cases involving retail sales under the Retail Installment Sales Act (RISA) and the Motor Vehicle Retail Installment Sales Act (MVRISA), persons who sign contracts but do not receive the goods are called "co-signers".

If the contract contains specified language, the co-signor may be a "guarantor". As in the UCC provisions, the obligation of the "guarantor" is secondary and not primary. The obligation arises only after the seller or holder has obtained a judgment against the primary obligor and the execution is returned unsatisfied or the primary obligor is insolvent or it is otherwise useless to proceed against him.

Whenever a creditor proceeds against a co-signer or a guarantor, that party may have the special defenses noted below.

Defenses Under RISA and MVRISA

Protection for Co-signers

In cases of retail installment sales, the Retail Installment Sales Act (RISA) and Motor Vehicle Retail Installment Sales Act (MVRISA) give special protection to co-signers. These Acts expressly provide that co-signers who sign a retail installment contract cannot be held liable unless at least one of the following apply:

•the co-signer actually received the goods or services;

•the co-signer is a parent or spouse of the buyer, or;

•the co-signer signed in the capacity of a "guarantor of collection". (See 810 ILCS 5/3-419). A guarantor of collection promises to pay only after the holder has obtained a judgment against the primary obligor and returned unsatisfied, or after the primary obligor has became insolvent or it is otherwise unless to proceed against him:

For a motor vehicle installment sale, the co-signer will be liable if the co-signer name appears on title as the owner of the vehicle.

For retail sales, the co-signer will be liable if the co-signer signs a separate authorization.

Protection for Guarantors

The RISA and MVRISA statutes go even further to protect a "guarantor" by providing that no provision in a retail installment contract obligating a guarantor is valid unless both of the following are true:

(i) the following words appear below the guarantor’s signature:

"I hereby guarantee the collection of the above described amount upon failure of the seller named herein to collect said amount from the buyer named herein."AND

(ii) the guarantor, in addition to signing the retail installment contract, signs a separate statement explaining the guarantor’s obligation. This statement must be in the exact form appearing in 815 ILCS 405/19 (RISA) and 815 ILCS 375/18 (MVRISA).

Commercial Code - Article 3 Defense

Where the creditor has extended the due date of payment, or has modified the agreement. These actions by the creditor may discharge the obligation of the accommodation party. There is a discharge only if the extension or modification has caused loss to the accommodation party with respect to his/her rights of recourse against the primary obligor.

Where the creditor has impaired the value of collateral that secures the debt. In this situation, the obligation of the accommodation party is discharged to the extent of the impairment.

It may not always be evident that someone is an accommodation party entitled to this defense. For example, suppose a husband and wife both sign for a loan or installment sale with the understanding that the husband would make the payments, they separate, and the husband defaults. The wife may be able to claim accommodation party status.

The FTC Credit Practices Rule Defense

DEFENSE The Federal Trade Commission Credit Practices Rule requires all "co-signers" to be given a notice prior to adding their signature to any debt. The co-signer must be given a separate document containing only the specific language of the Rule.

The Rule also makes it a deceptive act or practice to misrepresent the nature or extent of co-signer liability or to obligate the co-signer before informing her of the nature of liability as co-signer.

*Note that the FTC’s definition of "co-signer" is slightly different from the UCC definition of "accommodation party." The FTC only considers someone a co-signer where the signatory has received no consideration in exchange for the credit obligation. Remember that there is no private right of action under the FTC Act, but violation of the above FTC Rule gives rise to a claim under the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1 et. seq.

Consumer Fraud Act Defenses

Besides the special co-signor protection in RISA/MVRISA, Illinois also protects co-signors in the Consumer Fraud Act. In 815 ILCS 505/2S, it is provided that no creditor can take any collection action against a co-signer (including making adverse credit reports), unless prior thereto, the creditor has sent a notice to the co-signer, by first class mail, stating the following:

•the primary obligor has become delinquent or defaulted;

•the co-signor is responsible for payment, and;

•the co-signer must, within 15 days from the date the notice was sent, either pay the amount due or make arrangements for payment.

This notice follows a default and is distinguished from the FTC Notice which must be given before the co-signors sign in the first place. Section 505/2S expressly makes violation of this requirement an unlawful practice within the meaning of the Act. However, damages are limited to $250 plus reasonable attorneys fees.

Other Co-Signor Defenses

There may be an issue whether other contract defenses available to the principal debtor may also be available to the accommodation party. For example, can the co-signer raise the defense of breach of warranty? The answer is not always clear-cut, there is split in authority, and careful research will need to be done on such issues. However, it does seem to be established that certain defenses can be raised by a co-signer. In a repo case, an accommodation party may raise as a defense the failure to receive notice of the intended disposition of the collateral and may also contest the commercial reasonableness of the re-sale.

(* Essentially what 'willingtocope' suggested.)

If all fails - Massive has an offer, ...

Edited by FL4answer58
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FDIC 'Did You Know' http://www.fdic.gov/consumers/consumer/news/cnsum02/diduknow.html

"Be sure that the lender gives you a notice required by federal law before you agree to co-sign a loan. It explains your risks and responsibilities. (The fact that a lender didn't provide the required notice doesn't automatically excuse your debt as a co-signer, but it may help you in the long run. In some instances, for example, juries have decided that co-signers weren't liable for loan payments because they weren't advised of their responsibilities.)"

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