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Ask Dave

A Co-Signing Disaster

Susan's grown children didn't have enough credit to buy vehicles, so she co-signed for a truck and put a car in her own name. Now the collectors are after her for the money.

QUESTION: Susan in Dallas has two grown children. They didn’t have enough credit to buy vehicles, so she co-signed for her son’s truck while putting her daughter’s car in Susan’s name. Susan lost her job, and now the collectors are after her for the money. Her income went from $50,000 a year to $19,000 a year. Dave tells Susan she’s judgment-proof.

ANSWER: Disability income cannot have a garnishment placed on it, and in Texas, they don’t garnish income anyway. Your income is safe. They can put a lien on your property, but they can’t take it in Texas because of your homestead laws. Basically, State Farm is not going to be able to collect from you in your current situation. You don’t have anything they can get. You’re what we call judgment-proof.

Don’t talk to State Farm anymore. Tell State Farm that you’re on disability, and you don’t have any assets. “Call my son. Here’s his number. I’m on disability. I don’t have any assets. Call my daughter. Here’s her number.” And hang up the phone. Don’t have any more discussions longer than 30 seconds with State Farm.

You can’t fix this. You’ve got to let it go. You don’t have the ability to pay this. They don’t have the ability to collect it. You’re being abused by the collectors. It’s adding drama to your life in unbelievable layers, and your life’s got enough drama in it with your kids.

Bankruptcy doesn’t serve any point because bankruptcy keeps them from collecting a debt. Guess what? They can’t collect this debt. You need to turn every one of those calls back at your kids, because I want them to lean on your kids. I want them to sue your kids. I want them to clean your kids’ bank accounts out, because I want State Farm to get paid.

One last point of clarification for you: You used a phrase early in the story that you don’t need to use anymore. You said, “I was being a good mother.” You thought you were being a good mother, but you really weren’t because you created a mess for them and for you. You were trying to do something nice, but if you want to say that phrase again, say, “I thought I was being a good mother.” It hasn’t turned out real well for anybody in this deal. Nobody’s happy. I’m not even happy, and I’m not in the deal.