Our client co-signed on a car note for her then boyfriend. He later defaulted on the payments, the car was then repossessed and sold at auction. Then, Sunrise Credit Services, Inc. (a collection company) began pursuing collection activity on behalf of their client, the lender of the auto loan in this case, Hudson Valley Federal Credit Union against our client for the deficiency amount. The deficiency amount is the amount of debt remaining after the vehicle is sold at auction. As the co-signer, or co-maker as Sunrise referred to her, she was as responsible for the debt as the actual borrower. These creditors usually pursue people who actually have assets or income as opposed to the co-signor’s who they either cannot find or do not have assets..
After intense negotiations, we were able to settle the $26,400 debt in full for a lump sum payment of $5,000. This settlement amounted to an 81% discount that our client allegedly owed on this auto repossession debt. Though co-signers are often unaware of their liability, similar scenarios are very common. If you are being pursued by a collection company or have been served with process on a similar debt, it is very important to act quickly and speak to a knowledgeable attorney who can guide you to preserve your rights and prevent a default judgment against you.