I have been researching this issue for awhile now (IAAL, but don't practice anywhere near this area), and since this forum seems to have the best collection of collective wisdom on this area...
In Ohio, a very elderly relative co-signed for an auto loan for a "friend of the family" ("Deadbeat"), who has not made on-time payments. Grandma signed the promissory note as the "second" signer, but does NOT appear anywhere on the title. As far as I'm aware, there are no other documents she signed other than the note.
With payments on the loan 60+ days past due, the bank offset the outstanding payments with funds in a deposit account. Deadbeat has claimed he made two payments last week, but the bank has no records of any such payments.
We understand that Deadbeat has other creditors knocking at the door.
1. Grandma is jointly and severally liable on the note, but she doesn't have anything resembling a perfected security interest in the vehicle. Self-help repossession is thus out of the question.
2. Grandma can do nothing to stop the bank from calling her, short of paying off the loan or refinancing the debt. FDCPA doesn't apply because the bank is collecting its own debt (for now).
3. We can sue Deadbeat on a theory of unjust enrichment and breach of oral contract to recover the funds offset by the bank. At the end of the day, we'd have a judgment entry which would put us at the back of the line behind his other creditors and behind outstanding child support. Blood out of a stone.
4. We can sue for replevin, but that gets us a vehicle (which does us little good) and the court gets to apply equity to carve up Deadbeat's (undivided) interest in the car, such as it is.
5. Even if we wanted to pursue theories like lack of capacity or predatory lending (arguing that Grandma had no idea what she's signing), Plaintiff's lawyers are unlikely to take such a case on contingency.
My hunch is that Grandma is screwed :wallbang: but I thought I'd check the collective wisdom of ExpertLaw before breaking the bad news.