5/09/2005
Advice from Nashville's leading Financial Aid Advisor Dave Ramsey

Dave Says
By Dave Ramsey
Author of:
Financial Peace and
The Total Money Makeover
"I co-signed for
ex-girlfriends lease!"
Dear Dave,
I was dating someone last year that I was expecting to marry. She was having car
problems so I co-signed on a lease with her. Now weve broken up and she still
has the car. So far, shes made one payment and Ive made one. We have a
forfeiture agreement on the car where, if she didnt make a payment by the end
of the month, I could come get the car. Her parents have offered to buy her
another car and shes offering to just give me the leased car. She wont tell me
how much her parents are willing to give her for a new car. Our conversations
have become pretty confrontational.
Ive already got a leased truck. Why should I take on these payments as well?
Daryl in Huntsville, AL
Dear Daryl,
Oh, no! You did two no-nos at once a lease and you co-signed!
I would not take that car as fulfillment of the amount she owes. Morally, she
should find out the buy-out amount, sell the car and pay the difference to the
lender. If she doesnt have the money, her parents could pay the difference,
since theyre offering to buy her a car anyway.
The reality is that youre going to have to take control of this situation. If
she wont take care of this right away, youll have to take the car, sell it and
finance the difference. Let her know that if it comes to that, youll be coming
back and suing her for whatever amount you had to finance.
The lender will call her once and then theyll call you sixteen times because
they know youve got the deep pockets. Shes not good for the money and they
know that. Thats why they wouldnt lend her the money in the first place
without you co-signing.
Dont let the car be repossessed either. Theyll take the car and sell it for
less than wholesale and come sue you for the difference. I know you were just
trying to help her, but youre legally responsible now too.
What a great example of why you should never co-sign for someone, even if its
someone you think youre going to marry.
-Dave
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