Legal Question in Business Law in Tennessee

A friend at work has a car loan, which was co-signed by her mother in law. Recently, the relationship between the two has gone south, and the mother in law in threatening to pull the plug on the car loan and leave my friend to fend for herself in attempting to get refinanced. Does the in law have any right to get the bank to cancel this car loan?


Asked on 7/08/10, 8:05 pm

1 Answer from Attorneys
Kevin B. Murphy Franchise Foundations, APC

Any attorney will say the mother-in-law, by guaranteeing the loan as a co-signer, is on the hook financially. If the payments are not made, the holder of the loan note will repossess the vehicle, sell it for whatever they can get, then look to both your friend and the co-signer for the difference between what it sold for and the loan balance, plus attorneys fees, costs, etc. She can't just go to the bank and cancel the loan - it doesn't work that way. She can ask to be removed as a co-signer, but they won't let her off. What reason would they have to do that? She is the more responsible financial party and they will keep her on the hook. Consult with an attorney in your area for specifics.

Kevin B. Murphy, B.S., M.B.A., J.D. - Mr. Franchise

Franchise Attorney

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Answered on 7/09/10, 2:57 am


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