17

I cosigned a loan for my ex on a refrigerator, microwave, and oven. I know it wasn't smart. But if I pay off loan, can I retrieve the items?

  • 11
    What is the locale? Laws vary, but you can often make a legal claim if you pay off the loan. – Nathan L Dec 14 '15 at 3:22
38

Unless your name is also on the lease/purchase agreement/etc, co-signing for a loan typically does not grant you any ownership at all.

By co-signing a loan, you are essentially only saying "if the primary leasee is not able to make payment(s), I will make the payment(s) to cover it". This is why it is often a bad idea to co-sign loans for family or friends, as you may be left responsible to finish paying off a loan and they keep whatever goods/money/etc.

As others have noted, this will vary with jurisdiction and you may be legally entitled to some compensation (some portion of the items, monetary reimbursement, etc), but you would need to follow the proper legal channels to actually acquire/retrieve whatever you are entitled to.

  • 13
    Actually, this depends on jurisdiction. As far as I know, in my country usual court ruling is "you paid XX%, you own XX% shares". – Mołot Dec 14 '15 at 8:26
  • 3
    @MichaelBlackburn, which "this" do you mean is true -- that co-signing for a loan doesn't grant you any ownership, or that your share of the ownership is proportional to your share of paying off the loan? – Joe Dec 14 '15 at 18:36
  • 3
    @molot But surely any "paid X% you own X%" rule only applies if there is a voluntary transaction. I can't just decide that I like your house or car, go to the bank without your knowledge or consent and pay off your loan, and declare that I am now a part owner. – Jay Dec 14 '15 at 19:37
  • The fact you co-signed on the original loan means that the primary loanee is aware of your involvement so the "paying a pseudo-random loan off" is not a very accurate equivalent, but I'd imagine there would still be some legal process through which you would have to go to legally seize the product(s) assuming your jurisdiction allows for it. – Jason Rush Dec 14 '15 at 19:41
  • 1
    @Joe sorry, I was replying to the answer, not the comment above mine. I've deleted it, as I can see it would be confusing. I was saying for most US jurisdictions Jason is correct. In Illinois, it is not true, a co-signor has the right to the collateral. ilga.gov/legislation/ilcs/documents/081000050K9-623.htm – Michael Blackburn Dec 14 '15 at 20:08
12

Are you saying that your ex defaulted on the loan and the lender came after you as co-signer? Or are you saying that you just voluntarily decided to pay off the loan?

IANAL, but co-signing a loan does not, of itself, give you any interest in the property. You cannot normally transfer property without the consent of the previous owner. You have to have a contract. Not necessarily a written contract, but at least some agreement to sell.

For example, if I decided that I like my neighbor's car, I can't just decide that I think it's worth $10,000, stuff a check for that amount in his mailbox, and take the car. Likewise, if he still owed $10,000 on the car, I can't just go to the bank, pay off the loan, and declare that I now own the car.

Let me repeat, I am not a lawyer. But my understanding is that co-signing a loan does not, of itself, give you any rights to the property. If it's a vehicle or a house, your name must be on the title to give you any rights. That's why when you buy a house or a car, the lender gets a notation on the title that they have a lien. For something like an appliance, your name would have to be on the sales contract.

The government can seize property without the owner's consent, e.g. eminent domain. And you can seize someone's property with a court order. But I presume you're not the government and you don't have a court order.

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.