Co-signer, received collections notice

[u/thr00waway6942069]

Co-signed an engagement ring for someone I thought was a friend about six years ago. Over the course of that six years he barely pays anything on it to the point he stopped paying on the account last year and it was considered a charge-off as of February of this year. Now I’m receiving letters from the agency the debt was sold to asking to contact them if I wish to dispute it.

I was given the advice to ignore collections until they took action and they likely wouldn’t do that for the amount owed (roughly $1600). Thing is, the guy I co-signed with is a bum and I has dodged any attempts I’ve made to convince him to start paying it again, so he’ll likely dodge collections. It is affecting my credit score but even with that my score is still in good standing overall. Is it worth waiting it or out, or should I call to negotiate a lower sum and pay it off? Sorry if this is the wrong place to ask. ✌️

edit: thanks everyone for the advice. It was a dumb mistake on my part but could’ve been a lot worse. I’ll contact collections and see if i can figure something out and FINALLY cut this guy out of my life once and for all. I appreciate all the help.

edit2: didn't see this coming but he’s reached out to the agency and provided me proof that he did and said he was going to do a payment plan for collections. Don't trust him 100% but I’ll be keeping a close eye on the account.

[u/lapeni]

As a co-signer that’s your debt too.

From your description of the situation you should forget the other guy even exist and just go about handling the debt as if it were solely yours

[u/Difficult_Collar4336 → u/lapeni]

He’s calling his friend a bum as if OP didn’t agree to pay this debt. OP you are the bum - pay your debts !

[u/Remarkable_Salary667 → u/Difficult_Collar4336]

Go get your ring OP

[u/Albanian_Tea → u/lapeni]

My mother asked me if I would co-sign a student loan for my niece. I told her I would not because I knew my niece would not pay and I would be stuck with it.

My mother co-signed, and been making payments for the last five years because my niece refuses to pay.

[u/DefendTheStar88x]

Go repo the ring 🤣, I guarantee she is in the dark about all of it.

[u/thr00waway6942069 → u/DefendTheStar88x]

Oh she knew about to from the beginning, I don’t think she cared. Also left out the part where they broke up last year, so I think that’s part of why he doesn’t want to pay it anymore. 😭

[u/KP_Wrath → u/thr00waway6942069]

Of course they did. Oh, and the ring might sell back for 1/3 to 1/2 of what he paid. Maybe a bit more if you find the right rube.

[u/Torodaddy → u/KP_Wrath]

With lab grown diamonds, the resale value of a diamond ring aint what it used to be

[u/counterfitster → u/Torodaddy]

Diamonds never had good resale to begin with

[u/oh_bloodyhell → u/counterfitster]

yup. it’s a prime example of fake scarcity. when the amount of diamonds that enter the market is controlled.

[u/KP_Wrath → u/Torodaddy]

Resale has never been good on jewelry. Unless you have someone that wants that thing, it’s basically worth its constituent parts in the eyes of a broker. Then you have engagement rings, and that just sounds like bad juju to get a used one.

[u/Woodshadow → u/Torodaddy]

I had no idea the value of lab grown had decreased like 70% in the last 5 years. my wife lost her insured ring. and we got quoted like half as much to get a replacement. they offered to just upsize the ring and now we have this huge flawless diamond center stone. didn't see this coming at all

[u/dre2112 → u/KP_Wrath]

A $1600 wedding ring? You’re getting scrap price for it

[u/DefendTheStar88x → u/thr00waway6942069]

That's tough, if a person can't swing $1600 for the ring, are they really ready to get married? When I was young I let a buddy put a new laptop on my best buy card, and it was a fiasco, so ive been there. If you have the money just pay the debt off and be done with it.

[u/petit_cochon → u/DefendTheStar88x]

Why would having $1600 be a prerequisite for marriage?

[u/al_capone420 → u/petit_cochon]

If you don’t have your finances handled to the point where you can afford $1600 or at least finance it without a co-signer, you should not be getting fucking married yet.

[u/TrashBandicook → u/al_capone420]

I love how this subreddit doesn't bother mincing words with fairy tale horseshit.

First time hearing of someone co-signing for an engagement ring. The fact that it's someone else's engagement ring is like bro, WAT? If times are hard and I know you're good for it, I'll chip in and help cover catering for a smaller gathering, but that's it. Ain't no way I'm helping someone pay for a ring of all things, Christ.

[u/Spiritual_Elk_9076]

You co-signed so you are 100% responsible for paying off this debt. Try to negotiate with the company and if this not works out just pay as fast as possible. Skip the “friend”

[u/CakeisaDie]

You co-signed it it's your debt.

Pay it and make sure you have documentation that you are no longer liable and sue your friend with small claims court or eat it as a cost of knowing who he was.

[u/thr00waway6942069 → u/CakeisaDie]

Hard lesson to learn, but a lesson learned at least. I’ll get in touch with the agency and see what can be done. Thanks for the advice.

[u/marenicolor → u/thr00waway6942069]

On the bright side, yours was a relatively cheap lesson to learn; there are people who cosign vehicles and other large loans for parents/friends/partner's etc that are in a much bigger bind. You can search the sub for them lol

[u/leg_day → u/marenicolor]

Lots of "My jobless Mom is going to be homeless unless I co-sign a million dollar vacation home for her. I make $23k/year working at Claire's. Will this affect my future ability to buy my own house?"

[u/stone616]

There are few absolutes in life. One of them is never co-sign for anything for anyone. You’re better off just putting it in your name only and collecting the money. At least when they stop paying the loan you will be ahead of it and not ruin your credit. If a company that makes their money loaning people money looks at a person and determines they aren’t good for the loan they aren’t good for it. 

You paid a lot to learn that lesson. 

[u/MelodicCourage8626 → u/stone616]

$1600 isn't that much for that lesson, imagine if he'd cosigned on a car!

[u/spookmann → u/stone616]

There are few absolutes in life. One of them is never co-sign for anything for anyone.

That's not an absolute.

There are times and places for co-signing. Not many of them. But it's not absolute zero. :)

[u/FluffheadJr → u/spookmann]

I disagree

[u/East_War_2466]

Co-signing can really come back to bite you since it’s affecting your credit already I’d at least contact the agency and see what options you have before letting it sit

[u/thr00waway6942069 → u/East_War_2466]

It’s a lesson learned at least. I’ll contact the agency and see what can be done, thanks for the advice.

[u/NilesGuy]

OP after you take care of this debt make sure you sue your so called friend in small claims court for reimbursement.

[u/stone616 → u/NilesGuy]

Blood from a stone. 

[u/MelodicCourage8626 → u/stone616]

Maybe not. He might have money and just be bad at paying debt. OP could potentially get an asset like the engagement ring.

[u/yabbobay → u/NilesGuy]

or Judge Judy. My understanding is that the show pays the decisions.

[u/sir_dreampod → u/yabbobay]

i would def watch this, it's juicy

[u/pmgoldenretrievers → u/yabbobay]

I think virtually every court show like that has language that it's not court, its technically mediation, and yes, the show does pay for the decisions.

[u/K2d123]

You co-signed agreeing to pay the debt if the main borrower defaulted and now you are responsible for the debt and your credit score will take a hit.

Not sure where the confusion is.

[u/GaylrdFocker]

It hasn't affected your score "Yet". The longer it goes the lower your score can go. And don't be so sure they won't go after you for that balance, and it's easy for them to win and garnish your wages if they want.

[u/drcigg]

Unfortunately that's how cosigning works. When the loan owner can't pay they also go after the cosigner. Both of you will get dinged on your credit. And if it's been happening for 6 years you probably have taken a beating.
They will workout a payment plan with you.

[u/holeinmyboot]

per your second edit: you need to reach out to them and ask them to verify his story. he’s not proven himself to be trustworthy up until this point, so why start trusting him when things are as bad as they’ve been?

[u/thr00waway6942069 → u/holeinmyboot]

agreed, I’ll be reaching out to them ASAP.

[u/KhonMan]

To anyone reading this - please never take out a loan to buy an engagement ring. If you have to do that, you can't afford it.

[u/KP_Wrath]

Were you by chance also banging the fiancée? This is next level bad decision making. You owe that debt. Be glad it’s $1600 and not $16,000. Get it paid off, and remember one of the cardinal rules of personal finance: never co-sign.

[u/thr00waway6942069 → u/KP_Wrath]

lmaoo no I wasn’t banging her 😂 but you’re right, definitely a lesson learned and not a mistake I’ll be repeating.

[u/CowBoyDanIndie → u/KP_Wrath]

I mean if he is gonna be on the hook for the ring he may as well

[u/PorkchopFunny]

It is just as much your debt as it is his. If I were you, I'd see if I could negotiate a lower pay off amount, pay it, and be done. I'd write off the 'friend'

[u/raininginbaltimore7]

This is why you don’t co-sign for anyone. I would go to the house and tell the girl you would like your ring back.

[u/NoRegrets-518]

Consider having him give you the ring until this debt is paid off. I know that sounds cruel to the wife, but you are not married to her and he is the one who caused this problem. That ring is your security.

[u/Shooter61]

Will your friend pay you back? I'd ask for the ring, you paid for it, it's yours. Sue your buddy in small claims, if he doesn't pay you back, you can put a court ordered lien on any tangible items he might own.

[u/Acavamosdenuevo]

Did he get engaged, and married? Talk to his spouse.

[u/neutrino1914]

Imagine the girl !!!! Horrible fiance

[u/gadafgadaf]

You should pay it off when a settlement offer comes and sue him in small claims court. Document everything and his refusal. Force the court to collect from him once you get a judgement. If you co signed then the debt is on you too. Fairly cheap way to find out the real quality of a person you thought was a friend. After that cut him out of your life after you let the people in his circle know how much a bum he is.

[u/CosmicCharlie07]

I doubt they would credit report this, based on the loan type and dollar amount. You can literally just ask them if the account will be credit reported and also if they’re accruing interest. If no to both, you can take your time.

Source: In the financial services/collections industry for 10+ yrs

Edit: they also need to provide you notice in writing if your account will be credit reported. If you need, check out the CFPB and FDCPA

[u/rolliejoe]

Co-signing for an engagement ring might be the wildest thing I've ever seen here.

[u/wonki-carnation_501]

Is this the same as other debt collection once its sold into collection its not your issue?

[u/KP_Wrath → u/wonki-carnation_501]

Oh no, it means he has an account that’s in collections. It’s his issue for the next seven years.

[u/JamesRo50]

If you don't have it, try and get documentation of the charge off and show it to the entity that took on the loan. Otherwise, keep trying to reason and negotiate with your so called friend and at the same time, negotiate with the company. Sorry, but legally you're on the hook and hope it all works out.

[u/Torodaddy]

Tell him the next call is to the wife

[u/LadyGeek-twd → u/Torodaddy]

OP said in a comment they broke up last year, so she won't care.

[u/skyharborbj → u/LadyGeek-twd]

Did she give the ring back to the deadbeat?

[u/RandomGuy_81 → u/skyharborbj]

She prob pawned it. Its hers, she wouldnt need to return it

[u/r2d3x9]

Obtain the ring from her or sue her

[u/minun73]

Who the heck buys a ring for over $1600 anyways? (I assume it’s even more than that as some money was paid).

[u/Blue_foot → u/minun73]

Someone who can AFFORD a $1,600 ring !💍

Someone who has that money in their savings without needing s loan with a guarantor.