Q. I allowed my former lover to use several of my credit cards by making him an authorized signatory on my Visa and MasterCard accounts. I also agreed to co-sign a bank loan so he could buy a new car. I learned from the bank that he is behind on the car loan and the bank wants me to make the loan current even though I don't have the car. What are my legal rights and obligations?
A. If your former lover hasn't made the payments on the car loan there is also a good chance that he could use your credit accounts, leaving you legally responsible for payment of all those debts.
While you are going through the process of a separation from your lover one of the first things you should do is write to all your creditors, where he is authorized to sign, close those accounts and ask for a new account in your name alone. Tell your lover you're doing it so he can write for his own personal account at the same time.
To make sure that your canceled accounts have in fact been closed get a copy of your credit report. If your credit report shows a closed account as open follow the bureaus' procedures for reporting an error. They will then have to verify your claim with the creditor within a reasonable time, usually 30 days, and advise you of the results. If the creditor agrees that you did close the account, it will be so listed.
Regarding the debts that you co-signed for your former lover, the drawback to guaranteeing a loan is that the guarantor can be fully obligated for the entire loan amount, not just the portion due, if there is a default in payment of the loan. Because you co-signed on the car loan you are legally responsible to pay the loan if your former lover fails to make the payments even though you don't have use of the car.
There could also be a problem if the bank repossess the car. Usually when a bank repossess a car for non-payment, they will sell the car trying to get the highest price possible. If the sales price is less than the amount due on the loan there is a deficiency. You as guarantor of the loan will be liable to pay that deficiency.