co.signer

[gonefishin]

My wife co.signed a small loan aprox. 5 years ago for $3000.00 without my knowledge. We had a phone call on the 6th of June 2012 from collection agency telling us my wife owes $19,572.55.. Is this possible and legal?? shouldn't we have been notified when the loan was not been taken care of?? I'm worried I may lose our home or have to borrow money I can't afford?? Please help us.. Worried..

 

[mightymoose]

If she cosigned the loan she became responsible for repayment the same as the other cosigner. She should have kept watch, because she is responsible for repayment, including interest and late fees.
That said, most of the 19k is likely bogus. The collection agency seeking payment probably bought the loan for less than 1k.
Most collection agencies are not worth responding to, however if you do respond you should seek an itemized account of the debt as eell as the last date of acti ity/payment and be prepared to make a lowball offer of 1k or so for settlement. Any settlement agreement you make needs to be in writing and include language stating the debt is satisfied and that credit reports will show 'paid as agreed' or some other acceptable language.
Do not pay a dime without obtaining a written agreement. Any payment will restart the clock on the statute of limitations. Depending on the last date of activity the SOL may already have passed. If it has, you have an easy defense if sued.
The remaining problem is credit, and you are already 5 years in to 7 years worth of reporting. You might just want to ride it out.
The fastest way to get them off your back is to pay the debt- but they will screw you over and squeeze for more if you are not careful.
Waiting it out may be a realistic option, though you will endure collection attempts.