loan not being paid back

[plp15]

My jurisdiction is: in

i took out a loan for a car for a friend of mine. he is driving the car and has not start paying me back yet. he is also asking for the extra set of keys, i told him not until he pays for the car in full. the title is under both our names. should i draw up paperwork so he can sign and get it notorarized and do i give up the keys the car that he has not even started paying on.

 

[Michael Wechsler]

You should get paperwork drawn up as soon as possible. I wouldn't give up the keys so quickly without getting additional assurances. Read this forum. You will find dozens of situations which are similar to yours, you take out a loan for a friend, they pay the first few months and then it goes into default. If he hasn't even started paying you now, what do you think it will be like later? I certainly wouldn't be giving up my keys so quickly and can't understand why you would without some additional guarantee.

 

[jharris352]

Prof is certainly right on this one. Another axiom of law: Do the paperwork first have the fun later. Why on earth is your friend driving the car without a WRITTEN agreement binding him first!? He is already acting badly by wanting the extra keys to 'HIS' car without having paid anything for it.

I fear that you will truly regret this before it is over.

I personally would take my extra set of keys and go get the car. With the car safely stored in my garage I would invite the friend over for an agreement session. You put the agreement in writing and he gets ONE set of keys. You keep the other until he pays you off.

NOTE: Do not ever let him pay your note directly to the lender! If you do, he will pay until he doesn't and you will start getting late payments on your credit. Let him pay YOU, YOU pay your lender. I was 15 years in the mortgage business and I can't tell you how many stellar credit reports I have seen with a repossession on them for doing what you are doing with this "friend."

The best way to ruin a friendship is to loan money. You loaned a lot of it. Good luck.