My daughter wrecked her car years ago and totalled it. My wife co-signed the loan. The insurance check to pay for the car was sent and my wife mailed it off to the bank that financed it. A time later, the bank calls for payment and my wife states that it was mailed off to​ the bank for repayment. The bank has no record of it being sent. It has now gone into collections. We have no recourse that we know of. Looking for suggestions.

  • Did the amount of the check actually cover the entire remaining loan amount? If it didn't, I think you still owe the difference. – mkennedy May 15 '17 at 23:04
  • I believe that part was ok, – Jack May 16 '17 at 3:55

Legally, the situation is quite clear:

Both your daughter and your wife (as co-signer) are jointly liable for the loan. If the bank did not receive payment (no matter why), they are free to pass the debt on to a collection agency, who can go after your daughter, your wife or both until the debt is paid.

That the car was totalled, and that your wife sent a check that apparently disappeared usually do not make a difference, legally speaking.

That said, there are some things you can do in practice. First (though that may be obvious in retrospect), important sums like a car payment should be sent in a traceable way, such as by wire transfer or via certified mail. Even if that's not the case here, if the letter is lost, you can ask the insurance company whether the check was cashed. If not, they can (and probably must) send you another one, and cancel the old one. Have you contacted the insurance company?

However, no matter what the insurance company says, you must pay the debt. Ask your daughter to contribute as much as you can, but pay the debt as quickly as possible, or negotiate a payment plan. Delaying further will only cause more trouble, and cost more money (collection agencies can charge additional fees, on top of the original debt).

Note that this is only my lay advice, without knowing your jurisdiction. If you are at all in doubt, consult a professional, such as a consumer advice agency, or a lawyer.

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