My Car is up for repo my grandfather is a co signer on the car and recently just passed. I heard that the car will be paid off.. Is that true? By the granffather that passed. I was told that because he passed that since it is up for repossession that it will be paid off.
The short answer is, the lender is going to do everything they can to get the money owed to them. Someone dying does not mean that they will suddenly give up on collecting the loan. And, generally, the situation you describe leaves several avenues for them to do so:
- If the primary on the loan (you) is making payments on schedule, and continues to do so, then effectively nothing changes.
- If you stop making payments, and the loan contract has a "successor clause" (most auto loans do), the lender is entitled to seek repayment in full from the deceased cosigner's estate. If or when that will actually happen will depend on many factors, including assets and other debt in the estate, and potentially court decisions on the order in which the debts are satisfied.
- As a last resort, if the primary is not making payments, and the deceased cosigner's estate is not liable (there was no successor clause) or is unable to pay back the loan, the bank can still use the lien they have on your vehicle's title to repossess your vehicle. The fact that a cosigner has died does not mean that they are not allowed to take your car or will not try to take it, if you stop paying them.
Keep in mind also that some loans are sold with insurance that will pay the loan back if the consumer dies (or is disabled in a way that prevents them from earning an income and paying the loan back). Some of these policies cover only the primary on the loan, others will cover cosigners as well. So, it's worth checking if your loan has such a policy (although, I'm assuming it doesn't, considering the nature of your question).