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.
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.
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).
4What would happen if a loan was co-signed immediately before the decedent's death, and went into default years later, after the estate had already been settled?– supercatAug 6, 2020 at 14:52
1@supercat That's an interesting question in its own right, and probably worth a separate question. (The answer is, "it depends," based on the wording of the contract - usually there is a successor clause, but it could simply become a loan for you alone, or it could call in the loan - all based on the contract, plus the jurisdiction as far as what is legal to be in the contract.)– JoeAug 6, 2020 at 15:26
3@supercat If the estate has been settled and the claims period has run, there can be no recovery from the co-signer. Usually, loans make the death of a co-signer an event of default to force refinancing with a single signer (or collection from the estate if that is not viable) to prevent that scenario. Aug 6, 2020 at 18:31