How Do I Get Off This Contract?

A frequent question asked by people is how to free themselves of the responsibility for a debt for which they are liable with another person. This frequently arises between family members, partners and friends when the relationship sours for one reason or another.

For example, James needs a car to get to work but his credit is not sufficient to buy the car alone. His girlfriend, Mary has good credit and wants to help James buy the car. The car will be for James’ use and he agrees to make payments on the car and maintain the car. Both Mary and James sign the contract at the dealership agreeing to pay for the car and both are listed on the title to the car.

A few years later, Mary and James have a falling out. Before long, Mary starts to receive calls from a collection agency because James hasn’t made the monthly payments. Mary has never used the car, never made any payments and doesn’t have the car in her possession. She believes that she shouldn’t be responsible because James agreed to make the payments.

How does Mary get out of this situation?

She doesn’t want the missed payments to show up on her credit report.

Most people believe that since they made an agreement with the friend or family member, they should be released from responsibility. However, legally, that is not the case. Mary and James both made a contract with the dealer to pay for the car.

The contract between the Mary and James did not include the dealer. Only the dealer can release the Mary. So, what are her options?

Mary can simply make the payments. That may be easier said than done in many cases. It is also possible for Mary to make an agreement to pay the dealer a certain amount to release her from the contract.

There is no guaranty a creditor will do this and in many cases, they will not.

The last option is for Mary to help the creditor repossess the car and apply the value of the car to the debt. This doesn’t release Mary from her obligation to pay, but it does reduce the debt.

Dealing with creditors can be tricky and it is easy not to fully protect yourself. This is where a knowledgeable attorney can assist.

If you find yourself in this situation, please call Kurtz Law, PLLC to discuss your legal matter!