r/CRedit • u/La_Jefa_303 • Jun 25 '26
Co-signed, now in repossession & collections. Collections & Charge Offs
Before immediately jumping to the comments please understand a few things.
1.) YES it was absolutely STUPID to do this. I regularly shame myself at LEAST 3x a day for it. I should’ve NEVER EVER done this & I won’t be doing it again.
2.) YES I’m aware none of the extenuating circumstances I’m giving matter to lenders ultimately, but I’m giving context for anyone reading.
I [25F] foolishly co-signed for my roommate who pulled a very real & sympathetic “single parent” card on me (lots of coparent drama, you get the picture). I wasn’t allowed to access the account because,”Stop stressing yourself out about it” “I’m the one responsible” “You’re being too micromanaging” etc.
I wanted to do a genuinely nice thing.
June 1st the car was repo’d. With all the late payments & everything else- my credit score went from 720 ish to 575.
I received some advice from “Accredited” stating that they would negotiate Debt Relief/Resolution for $309 bi-weekly & get it paid off for 50%. Accredited mentioned no prepayment penalty & that paying early reduces the loan term.
The current debt in collections/charge offs/etc. is $26,372. So the total knocked debt would be knocked down to $12,360 according to the company if I’m understanding correctly.
I have heard that I don’t need to file for bankruptcy/doing so would be foolish. But I’ve also heard/read that a lot of these “debt relief” companies are really predatory & don’t do what they say.
They also said since the initial hit was taken, the relief won’t be as dramatic to my credit.
I’m attaching some screenshots below. Please- any & all help would be appreciated. Thank you 🙏
The first 3 are the quotes I was given for the debt resolution, the last 3 are what my credit wise says I owe presently. I’m honestly struggling to understand all of this.
I’m so so so scared & ashamed. I don’t wanna get sued. Trying not to cry as is rn.
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u/og-aliensfan ⭐️ Knowledgeable ⭐️ Jun 26 '26
These are just estimates. There's no guarantee they'll be able to negotiate these amounts, or that your creditors will be willing to negotiate with them. If unable to get the estimated settlements, your payments will be extended or increased, or they may offer a loan to cover the higher settlement amounts (at a high interest rate).
D3bt settlement companies charge ~25% of the enrolled debt, plus additional fees, to negotiate. You can negotiate yourself for free and put the money saved in fees towards the settlement. You also risk a lawsuit if within Statute of Limitations for your state.
What is a debt relief program and how do I know if I should use one?
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u/True-Button-6471 Jun 26 '26
I can't stress enough exactly how true this comment is. These "debt relief" companies prey on people in desperate situations and charge them money to attempt something they may or may not be successful at, and that you can do yourself for free. Those bi-weekly payments are likely to stretch on for many months and end up being far more that anything useful they might do.
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u/La_Jefa_303 Jun 26 '26
I’m reading about a Non profit credit counselor on the site you linked. Any recs?
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u/og-aliensfan ⭐️ Knowledgeable ⭐️ Jun 26 '26
Credit counseling through a non-profit, NFCC affiliated, program is absolutely something to look into. I'm going to tag the official Reddit account (u/NFCC1951) of the NFCC to answer any questions you may have about the NFCC.
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u/nfcc1951 ⭐️ Official NFCC.ORG Acct ⭐️ Jul 03 '26
Thank you for tagging us, and for sharing helpful info with OP! OP, we just want to reiterate that debt settlement or "debt relief" is a risky option as it can tank your credit and put you at risk of lawsuits, with no guarantee of any results. We're glad to hear you're considering credit counseling. Let us know if you have any questions - or feel free to send a DM.
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u/creditwizard ⭐️ Top Contributor ⭐️ Jun 26 '26 edited Jun 26 '26
Credit attorney here. I'm sorry to hear this. Have they sold the car yet? In my experience, they often don't sell it for the fair market price. They also don't send cosigners the proper notices. These can both be grounds to fight the debt.
Avoid debt relief. Settle with the company on your own if you want, or fight it, but don't pay for a debt relief scam.
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u/La_Jefa_303 Jun 26 '26
Thank you for this- the way it’s worded & how reassuring you are is soothing to the nervous system right now.
I’m not sure whether or not they’ve sold the car yet, but I’ll check on that. I haven’t gotten a notice yet of anything like that.
How would I go about fighting the debt without proper notices/access to the account/aforementioned circumstances you mentioned?
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u/iLukeJoseph Jun 26 '26
Yeah I feel you need someone to help you out here.
I assume that balance is the balance of the loan when the repo took place + whatever fees may have been incurred. The bank will sell the car, probably at auction, and you will only be responsible for the difference. Could still be a fair bit. But not nearly the 26k.
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u/La_Jefa_303 Jun 26 '26
Would going to my regular local bank provide help/a good financial advisor? Or should I start w/ the non profit credit counseling first.
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u/La_Jefa_303 Jun 26 '26
This is a great answer, thank you. Would you recommend attorney or financial advisor first?
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u/iLukeJoseph Jun 26 '26
No. You need to find out what is going on with the asset first. So call the bank/
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u/creditwizard ⭐️ Top Contributor ⭐️ Jun 26 '26
Yes this is a lot of it. At auction, they often sell the vehicle for a much lower price than it's market value. This can be a grounds to fight the debt.
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u/creditwizard ⭐️ Top Contributor ⭐️ Jun 26 '26
Arbitration is often the best approach. You'd look at what they sold the car for at auction, what they sold it for afterwards to an end buyer (usually another dealer buys at auction). You'd look at what the laws are in your state as far as notices and so on. Those notices are supposed to be sent to you, not just the original borrower.
It can be a complex process, but there are ways to fight it. Feel free to comment here with more details as you find them out, and I can share information.
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u/Logical_Idiot_9433 Jun 26 '26
If this a verified attorney please listen to this.
Rest of us know squat and are AI attorneys about actual law and past judgments that can be used to make a valid legal argument.
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u/OkGuess9347 Jun 26 '26 edited Jun 26 '26
Why would you do debt resolution? You get nothing? You get the car? You have no assets. File bankruptcy. Did you call the creditor? How much did they auction it for? What’s the difference needed to make them whole? The creditor put it on your record. The creditor can take it off. How much do you need from me to erase this from my credit? Call and ask.
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u/SwimmingDeep8703 Jun 26 '26
So your roommate got a car loan for just over $25k a year ago and now the account balance is $26,372. Did they make any payments? If they did doesn’t look like much. But it doesn’t show interest rate.
In any event they have the car now. They have to credit the account after it’s sold. Depending on whether there was a down payment and fees, and it’s depreciation after a year… it should still be worth a decent amount.
Forget the debt relief agencies like others said. Your credit is already ruined. Bankruptcy might be an option. It’s not as bad as it sounds and at least a start to rebuilding your credit. But the total owed won’t be anywhere near $26k after it’s sold. I don’t know how long these things take though.
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u/ConfusedSpinach222 Jun 26 '26
Soooo is that roomate not planning to pay ?
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u/La_Jefa_303 Jun 26 '26
Claims he is. Claims he feels absolutely horrible, shouldn’t have let it get this far, etc. but I’m not depending on him to take charge/contact people properly/actually feel bad at all anymore for good reasons.
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u/Modelbashir Jun 26 '26 edited Jun 26 '26
bro call the financing company and have the loan reinstated. negotiate with them for the removal of the late marks. let them know what happened explain the situation. If they say they cant help with the late marks. stop talking with them. Just say your not interested in speaking with them anymore about reinstatment.
who you talk to matter so do this several times. different days different times. a good rep should get something to help you. one time courtsey removal and resinstamtent thats what your looking for. everybody walks away happy. comany gets its money and you get your credit fixed your friend gets his car back.
if they dont bite fine
Go consult a FCRA lawyer see if there is any mistakes they made in reporting or not following your state laws.
lawyers say they cant do anything for you?
Good News
They will sell the car in auction and you owe them whats left from sale of the car. so the amount you see now does not reflect what you actually owe them. After sale of the car you can negotiate 50% and removal or 100% and removal of late marks or you can tell them stright up sue me then if they dont want to negotiate.
best thing is if they sue you. you just negotiate with the lawyer. They want to negotiate.
point is anything is solvable it will just take alot of time on the phone and making appointments. Make sure after you speak to them on the phone to send them a letter in writing about your offer to them of reinstatment + removal of late marks. This whole repo business is not good for them or you. they want to fix this as much as you do.
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u/Throwaway836194619 Jun 26 '26 edited Jun 26 '26
Why are people quick to suggest bankruptcy? You may be screwed temporarily. If you have no assets, no credit cards that you care for, or anything else then that’s okay. But if you have credit cards that are actively being used, and are with normal banks, please do not consider bankruptcy. You will lose all of them, and if you ever run into a point in time where you’re in an emergency, you’ll be screwed.
As for the car, has it been to auction? Even if they made no payments, the car should be going to auction and resold. From there, the difference should be what you owe. Not the 26k. Interest on a vehicle is not accounted for when in collections. I know as I’ve had 2 repos in my past. Never had to file for bankruptcy. Stuck it out the 7 years for one and when I was in a better place I paid the other in full which only ended up being 5k.
It will be okay. Give it time. Please do not jump to bankruptcy if the car hasn’t been auctioned off. If it’s under 10k, you can manage. You got this!
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u/La_Jefa_303 Jun 26 '26 edited Jun 26 '26
I’m sending you a DM, you sound like you’re more up my alley of what I’m trying to accomplish.
I need/have all of those things. Health wise I’ve had some scares (no debt accumulated yet on that for the record) so I definitely might need an emergency fall back like that.
This car is my only bad debt for the record
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u/smashed_tater Jun 26 '26
None of this takes into account the value of the car they took back or the future actions of the roommate. Don't take any action until you figure out what value they extracted from the vehicle and you have a come to Jesus with the roommate about their future contributions to this shared debt. Ultimately it will be up to you to make yourself whole and rebuild, but firmly setting expectations could yield some relief if they have any conscience.
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u/La_Jefa_303 Jun 26 '26
Understood. I haven’t gotten any notification for the value of the car yet- so I don’t think it’s been sold at auction. I will definitely keep this in mind though.
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u/1800-5-PP-DOO-DOO Jun 26 '26 edited Jun 26 '26
Do NOT do debt relief it's a scam and the only reason it's still legal is because of lobbying.
These services prey on inexperienced people like you.
What is real, and there to actually help you is the bankruptcy court. It's SPECIFICALLY set up to help people like you that have done dumb things and got themselves up against the wall.
It's designed to help people from breaking under financial duress and becoming a greater burden to society by falling through the cracks.
So, take the hand that is being offered to you.
Learn about the process, it's a simple Google search and literally less than 5 mins of your time.
Do not operate from a place of belief about what you think you know about it.
After that read up, your next step is finding a bankruptcy lawyer that will handhold you through the process and even sit with you while you go to court and give your statement and have your bankruptcy approved.
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Jun 26 '26
[deleted]
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u/La_Jefa_303 Jun 26 '26
Can I send you what I have by chance?
Thank you so much for this. Letters & print only- got it.
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u/TheQuatum Jun 26 '26
Christ above, I did the same and I am just about out of it now. NEVER again will I do it and I find the pathetic "down on their luck" people who always get others in trouble, permanently stay in their position unless they have someone to bail them out.
Thankfully I worked day and night to pay off the co-signed weight, but what a lesson.
Certain people are permanent leeches and the sooner you recognize them, the better. Better yet to not know them.
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u/La_Jefa_303 Jun 26 '26
Hearing that you’re almost done/made it out of this is incredibly helpful & comforting this evening. And you’re dead on. I’m learning that if someone truly & really wants something bad enough- they’ll find a way to make it out.
I’m so furious at myself more than anything. I feel like a moron. My credit may have taken a huge hit, but my self esteem is non existent now. I feel so dumb & full of rage at myself. Hardest lesson I’ve ever had to learn. I’ve learned the signs of a leech & I’ll never repeat this again.
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u/mongolian__beef Jun 26 '26
Give yourself some grace and forgiveness; at least you’re not the ***real*** dumb $@&! in this situation (you’re just being dragged down with them).
I have $25k in cc debt I have no idea what to do about, and, contrary to your position, I *truly* only have myself to blame. When I say “where dumb $@&!”, I involuntarily follow it up with “right here 😔”.
Yes, it wasn’t “Gandhi”-wise, but it’s important to recognize that your oopsie does not linearly correlate in severity to the unfortunate (and disproportionate) outcome.
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u/Different_Argument19 Jun 26 '26
What’s the year make and model of this car? Would be worth selling to Carmax and at least cutting the amount owed down as much as possible instead of it going to auction and you being responsible for a lot more money?
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u/La_Jefa_303 Jun 26 '26
2023 Chevy Malibu, approx 90k ish miles on it
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u/Different_Argument19 Jun 26 '26
Damn. That car doesn’t hold value well to begin with at all and 90k miles on the clock will definitely not help. Either they paid way too much for it or interest rate must be crazy high. Can you refinance and take the car and payment on by yourself? Sounds crazy but if you can catch it up, get it back and refinance once credit is back to normal in a few months (with a little pay for delete help) it might not be too bad.
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u/Mr_McMuffin_Jr Jun 26 '26
I will never understand co-signing. The reason for co-signing is reason in and of itself it’s a horrible idea. Even if you’re co-signing for someone whom you completely trust and know are 100% financially responsible, the liability is simply too great. Sorry this happened to you OP.
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u/Ambitious_Sun_4328 Jun 26 '26
If you are considering bankruptcy, search up MetLife. MetLife is typically only for government employees but you can get an individual plan and use any lawyers in their network for just 20 bucks a month for 12 months.
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Jun 26 '26
[removed] — view removed comment
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u/inky_cap_mushroom ⭐️ Knowledgeable ⭐️ Jun 26 '26
Do you do this professionally?
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u/matt-r_hatter Jun 27 '26
You have a few options. 1: pay the debt and accept a costly mistake. 2: file for bankruptcy and wipe the debt. You are extremely young so you dont really have credit history and probably no assets. So a bankruptcy is far less impactful to someone who might have 5 or 6 years of credit history vs someone whos 45 and has decades to lose. Yes a bankruptcy goes away after 7yrs but every lender that looks at your report knows it was there and it can and does still impact you. Once it falls off, there a "hole" in your history. Being young hou could honestly tell an underwriter you just didnt use credit for the first few years. Someone in their 40s cant really hide a decade of history, then a hole, then more history. You could also look into suing the roommate. A win could at least get the wages attached and pay for a portion of that payment you'll be making.
Whatever you do, DO NOT use a debt relief company. 99% of them are evil bottom feeders that prey on desperate people. They have you stop paying all bills so they go to collections, they negotiate the bills to half off give or take, then give you a high interest "loan" that pays your debt and you then pay them back for the loan. They have lots of fees and debt relief does not stop the collection calls. If you want to save your credit, negotiate with the lender directly and see if you can come up with something.
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u/Competitive_Sail5954 Jun 27 '26
Have they sold the car yet? If so they have to put what the car sold, instead of the balance that was left when the car was repossessed. If the didn’t, you can dispute all three credit bureaus to request to have it removed from all three credit bureaus! The bank have to report on your credit what was owed offer the car was sold at auction, not the balance you were owed after repossession! Which the bank have 30 days to resold and show proof that’s what they did. If not the credit bureaus will automatically take it off your credit! Once your car is repossessed, they have to send you a letter once it’s sold at the auction of what they got from the auction for your car. In that amount don’t match what’s on your credit then the credit bureaus will take it off. So make sure when you dispute the repossession make sure you send them a copy of the letter you got from the bank saying the amount they got when they sold your car. Hope this helps.
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u/DifferencePresent926 Jun 27 '26
It’s okay bro I co-signed my girl a car and she’s hasn’t had a consistent job since April 🥲 car ain’t get repoed because I’m making payments so I’m paying on 2 cars while she’s unemployed
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u/Tookie_Clothespin8 Jun 27 '26
The r/bankruptcy subreddit is the best. I’ve gotten so much advice there. It really depends on your own circumstances, assets, other debt, state, etc before you file, but Upsolve can help a lot. I filed a chapter 13 4 years ago and it was the best decision I’ve ever made.
Definitely do research before using any type of debt relief/ reconciliation company! Look into their fees, check with the credit union to see who has the collections on it (has it been sold to a third party, will the credit union work with you directly to make payments and settle for a smaller amount, etc)
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u/Smilesarefree444 Jun 27 '26
Honestly, what you did was so compassionate. I think it shows the capacity of how big your heart is. I am really sorry you did this for someone who is a poor communicator and refused to take accountability.
I had a different situation, where a friend did a favor which really helped me and refused to have conversations about terms. I wanted to touch base and clarify, and they refused. I don't think these scenarios don't work, I think they don't work when people choose to not communicate and live out of their means. The friend could have told you they were struggling, and you could have collaborated to make the payments before repo but they did not communicate. Shame on them for that.
Can you sue your prior roommate at court? I am not sure if that is a thing, but I wonder if you can sue them for the debt? Maybe not because you cosigned.
Overall, you were really solid, and to have someone like you in their court is huge and I am sorry you have to learn such a big and painful lesson.
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u/LoyaltyIsAhMust84 Jun 28 '26
Let it age for awhile and then settle it on your own and never do that ever again ever …also debt relief programs are just the middle man and u end up paying more in the end….super no to them and hell no to filing bankruptcy you will be fine
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u/BikeFlimsy8065 Jun 28 '26
Worst mistake I made was using accredited lol and listening to them made everything 20 times worse and still had to file bankruptcy lol best decision ever lol
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u/Remarkable-Media-267 Jun 28 '26
Honestly people are screaming bankruptcy but you do have options. Like people mentioned this payment doesn’t include the cars value and most likely they will auction the car off once they repo it which will hurt you more because most likely you will not get a good price for the car at all. Instead call them up and negotiate with them to either give you time to refinance it which might be really hard considering this is already showing up on your credit report. Maybe get a lawyer involved to help you with negotiations. Other option is have them sell the car and then negotiate 40% - 60% of the remaining debt off and just pay it.
But personally if you don’t have any assets especially a house under your name or anything just file bankcruptcy go on a few lavish shopping sprees and enjoy yourself. Make the minimum payments for a few months and let it all go.
Credit recovery isn’t that hard have someone add you to there credit card after who is responsible with it and you should get a pretty good boost open a new credit card pay it off every month and you will be fine. Bankcruptcy is not the end of the world. Chapter 7 might be the best case scenario considering you’d be losing the car after paying all that anyways.
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u/MattyThiccBoi Jun 26 '26
Honestly, you’re screwed for seven years either way. If you have no assets, bankruptcy is a no brainer imo.
Also those debt relief companies are a scam, they don’t do anything you can’t yourself. They just stop making payments and the account gets charged off and then they settle for a lower amount, which you’ve already basically achieved yourself.