Yes you can take your brother to court, but that will likely yield nothing. Even if a judgement is won, it probably won't be paid. You can utilize small claims court, so a lawyer does not need to be hired, which will reduce the outlay of money. However, any judgement won will unlikely be paid.
As adults, when we make mistakes, they are solved by forking over money. Cosigning, or borrowing money for a car for your brother (in this case), is a big mistake and will cost you guys money. Sorry for the bad news.
There are really only two options:
1) Deal with the bank directly and take over payments. This will have the least effect on your credit. Get your brother off the loan and title and satisfy the lien. One way to do part of that is to sell the car, or, you can sell one of your existing cars and drive this one instead.
2) Let the car go to auction. This will have a repossession on your credit, and will kind of kill your credit score. This is not always a bad as it sounds. The car will be sold for less than what it is worth so you will likely owe the bank about 15k. They will then attempt to collect that 15k from you, and you will have that on your credit.
If choosing #2, you will likely have a collection on your account for the difference between what the car brings and the amount owed. You can then attempt to settle the debt for less, but that will take some time of non-payment.
In a way this could be a blessing in disguise. If your BIL had a friend who borrowed this car, then hurt someone through negligent driving, you and your husband could be held liable. That could cost you guys in the hundreds of thousands of dollars.
Cosigning is a really bad idea. Buying a car, that one cannot pay cash for, is a bad idea. In this case you did both. Once you can find a way to pay off this lien, you can move forward with your lives. Learn from this and never cosign, and never buy a car that you cannot pay for with cash.
