When co-signing a loan results in dinged credit – About Your Online Magazine


Q: I did my son a favor by signing a car loan for him. To make a long story short, the car was voluntarily retaken after two years. My credit is in the pits. I can’t buy a chocolate bar on credit. Is there anything you suggest I do to improve my credit?

ONE: There are many companies that seek your money to help you improve your credit. I don’t think you need to become a new paying customer for any of them.

Instead, go to the Experian website (they are one of three credit bureaus) and search for “repair credit” in the search bar at the top of the home page. You will find some articles with suggestions that may be useful for you.

The Federal Trade Commission also has useful information on its website at www.consumer.ftc.gov. Once there, click on Cash and credit, Dealing with debts and Credit repair: how to help yourself.

Q: I have a 59-year-old daughter with special needs who lives in a community home. My other three daughters agreed to take care of her after I left. My father (her grandfather) created a trust fund for her, and I am the administrator. We found that it is not in her interest to receive income distributions from her fund while living there. Do you have any advice for me to give my three daughters for the future care of their sister?

ONE: If you have not already done so, you and your daughters must establish a relationship with a lawyer specializing in “elderly” law.

Older lawyers work with family members of people who are receiving government benefits and help them maximize benefits by spending as little of their own money as possible on the person’s care. The person does not have to be elderly to request the services of an older lawyer.

You should also speak to your estate planning attorney to make sure that you are leaving your own money and property for your special needs daughter in a properly written trust. You can leave the property for the existing trust that your father created, or you may need to create a new trust.

Make sure the right person is assigned to serve as the successor administrator for the trust your father created after you left the service. You or someone else in your family may have the power to appoint a new administrator, or the trust agreement may have other procedures in place to find out who replaces you.

After you die or become unable to meet your daughter’s needs, your other daughters will need to become more involved. Fortunately, she is in an institution where she is probably getting a lot of care.

The information in this column is intended to provide a general understanding of the law, not legal advice. Readers with legal issues, including those whose questions are addressed here, should consult with lawyers for advice on their particular circumstances. Ronald Lipman, of the Houston law firm Lipman & Associates, is certified in estate planning and legal successions by the Texas Board of Legal Specialization. Questions by email to stateyourcase@lipmanpc.com

Paula Fonseca