Is our church responsible for debts accrued by someone who took a car loan in our name? 20 Answers as of June 22, 2011

Our Church allowed a member to finance an auto loan in the name of our Church. The company needed that person to sign as a guarantor of the Loan. The vehicle was repossessed a year ago and the person who signed as guarantor of the loan is deceased. Can that company now come to us (the church) for the balance of that loan?

Ask a Local Attorney. 100% Anonymous. Free Answers.

Free Case Evaluation by a Local Lawyer: Click here
Cartwright Law Firm
Cartwright Law Firm | Andrea Cartwight
If the church was a co-signor on the loan, then the church would be legal responsible for any deficiency balance remaining from the repossession of vehicle. You need to review the original loan documents to determine whether the church was a co-signor on the account.
Answer Applies to: Michigan
Replied: 6/22/2011
The Law Office of Mark J. Markus
The Law Office of Mark J. Markus | Mark Markus
If the church signed on the loan agreement, yes it is responsible for any deficiency on the loan after sale of the vehicle.
Answer Applies to: California
Replied: 6/21/2011
CONSUMER PROTECTION ASSISTANCE COALITION, INC. (DE).
CONSUMER PROTECTION ASSISTANCE COALITION, INC. (DE). | Gary Lee Lane
They the guarantor sign on behalf of the church? Sounds like it. If signed in that capacity, yes the church is the guarantor and can be gone after.
Answer Applies to: California
Replied: 6/20/2011
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
It depends on who was the borrower. Was the church the actual purchaser and the guarantor merely a co-signer? If that is the case then the church has to pay. It does not matter that the co-signor died.
Answer Applies to: California
Replied: 6/20/2011
Burnham & Associates
Burnham & Associates | Stephanie K. Burnham
If the Church authorized the debt to be made in the name of the Church then the Church is liable for the repayment of any loan. Guarantors are just as liable as Co-Debtors, as Co-Signers, as original debtors.
Answer Applies to: New Hampshire
Replied: 6/20/2011
    Law Office of L. Paul Zahn
    Law Office of L. Paul Zahn | Paul Zahn
    Yes. That is what it means to be a guarantor of a loan.
    Answer Applies to: California
    Replied: 6/20/2011
    Law Office of Maureen O' Malley
    Law Office of Maureen O' Malley | Maureen O'Malley
    There's not enough information to answer this well. It would be important to look at the note. I *believe* that those who signed a guarantors would be the only ones liable. And I don't know if the church is set up as a corporation, etc. Please feel free to call me for further clarification.
    Answer Applies to: Virginia
    Replied: 6/20/2011
    Law Offices of John J. Ferry, Jr.
    Law Offices of John J. Ferry, Jr. | John J. Ferry, Jr.
    Yes. As co-signor or guarantor, the church will be responsible for the balance of the loan. You may want to file a claim with the estate of the person who took out the loan. If his estate has any assets it will be required to pay this debt. I hope you don't mind me pointing this out, but Proverbs 11:15states: "He who puts up security for another will surely suffer, but whoever refuses to strike hands in pledge is safe."
    Answer Applies to: Pennsylvania
    Replied: 6/20/2011
    Indianapolis Bankruptcy Law Office of Eric C. Lewis
    Indianapolis Bankruptcy Law Office of Eric C. Lewis | Eric Lewis
    Most likely yes if the loan is signed by someone authorized to act on behalf of the church.
    Answer Applies to: Indiana
    Replied: 6/20/2011
    Robert Peters, P.A.
    Robert Peters, P.A. | Robert L. Peters
    Its hard to tell without looking at the paperwork but it sounds like yes the bank could seek payment from the church.
    Answer Applies to: Florida
    Replied: 6/20/2011
    Rosenberg & Press
    Rosenberg & Press | Max L. Rosenberg
    Yes. Unfortunately your church as an entity is cosigned for the debt and cannot escape responsibility. However, the decedent's estate may also be responsible if he died with assets. You would need to probate his estate. Thanks for tuning in!
    Answer Applies to: Connecticut
    Replied: 6/20/2011
    Carballo Law Offices
    Carballo Law Offices | Tony E. Carballo
    Your question is not clear. If the deceased person was only a guarantor then the estate of that person would only be liable if the church does not pay. A guarantor is only liable when the primary obligor-debtor defaults. The primary obligor-debtor (the church) always remains liable. In the subject case the church defaulted and the vehicle was repossessed. Since that person is deceased then only the church remains liable unless the finance company filed a claim against his/her estate. If the deceased person's estate was probated by the court then the estate has to give notice to creditors and the finance company has a very limited time to file a claim and if no claim then no more liability to the estate. Most likely the creditor will have to go against the church. It is hard to go against a deceased person even if no estate was probated.
    Answer Applies to: California
    Replied: 6/20/2011
    Bankruptcy Law office of Bill Rubendall
    Bankruptcy Law office of Bill Rubendall | William M. Rubendall
    When the church financed the auto loan is took on the duty to repay it.
    Answer Applies to: California
    Replied: 6/20/2011
    The Law Office of Brian Nomi
    The Law Office of Brian Nomi | Brian H. Nomi
    Yes. For further information, its best to consult with an experienced attorney. Any good attorney will give you a free initial consultation.
    Answer Applies to: California
    Replied: 6/20/2011
    Bird & VanDyke, Inc.
    Bird & VanDyke, Inc. | David VanDyke
    It sounds like the person who co signed the loan probably did so personally and did not involve the church. Unless the church is a corporation and the church name appears on the title and the loan docs I would say the church is fine.
    Answer Applies to: California
    Replied: 6/20/2011
    The Schreiber Law Firm
    The Schreiber Law Firm | Jeffrey D. Schreiber
    If the church was the borrower and the now deceased person guaranteed the debt of the church, the church is still liable for the debt as all borrowers/guarantors are joint and severally liable, which means the creditor can go after one or both of them to collect some or all of the debt.
    Answer Applies to: California
    Replied: 6/20/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    It depends on the wording of the paperwork.
    Answer Applies to: Georgia
    Replied: 6/20/2011
    Breckenridge and Walton
    Breckenridge and Walton | Alan D. Walton
    Of course. The church, perhaps foolishly, accepted the responsibility and should repay the lender.
    Answer Applies to: Michigan
    Replied: 6/20/2011
    Hanson & Hanson
    Hanson & Hanson | Anna C. Hanson
    Unfortunately, yes. If the loan is in the name of the church, the church is legally liable for the debt regardless of who the vehicle was titled to or who made the payments. The lender would only attempt to collect from the guarantor if the church defaulted on the loan. The lender has the right to sue the church to collect the money if the church doesn't not pay the debt.
    Answer Applies to: Oklahoma
    Replied: 6/20/2011
    Ursula G. Barrios Law
    Ursula G. Barrios Law | Guillermo Machado
    If the church guaranteed the debt, yes.
    Answer Applies to: California
    Replied: 6/20/2011
Click to View More Answers:
12 3 4 Free Legal QuestionsConnect with a local attorney