is estate responsible for debt of car-loan co-signed by the decedant?

Question

My mother co-signed a car loan for her grandson ~3 years prior to her death . He defaulted on the loan and the car was repo'd AFTER her death. Can the loan company come after her WV estate for the debt? The car was sold prior to the estate receiving notification.

Answer 1

Yes, subject to the deadline for presenting claims to the estate of the decedent (within sixty days of publication of public notice).

If a timely claim is filed against the estate, Article 9 of the Uniform Commercial Code allows a defense in to deficiency claim debt such as this one that the method of the sale of the collateral was unreasonable, but this is rarely a complete defense and is rarely successful in practice. Lack of notice would not automatically invalidate the debt (and the instrument creating the debt probably waives the co-signers right to notice of a sale contractually).

Answer 2

A co-signer is equally liable for the debt, so the loan company can go after the grandson or your mother for the remainder of the debt. He would have gotten a letter from the creditor saying that the car had been sold for some amount (assuming that didn't take the car in full payment of the debt). The creditor is not limited to legal proceedings against the grandson – collecting from your mother's estate is another option. There is a 4 year statute of limitations on auto loans from the time of the breach, so waiting it out is probably not plausible.