Took Out A Car Loan For My Brother and Now He Doesn't Want To Pay It Off

Summary

Podcast Summary: The Ramsey Show Highlights – “Took Out A Car Loan For My Brother and Now He Doesn't Want To Pay It Off”

Episode Information:

• Title: Took Out A Car Loan For My Brother and Now He Doesn't Want To Pay It Off
• Host/Author: Ramsey Network
• Release Date: July 2, 2025
• Description: The Ramsey Show Highlights offers a concise, daily dose of life and financial advice in under ten minutes, featuring experts such as Dave Ramsey, Ken Coleman, Rachel Cruze, Dr. John Delony, George Kamel, and Jade Warshaw. This episode delves into the complexities of co-signing a car loan for a family member and the ensuing financial and relational challenges.

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Introduction

In this episode of The Ramsey Show Highlights, Carmen reaches out seeking guidance on a financial dilemma that has strained her relationship with her brother. Dave Ramsey and Jade Warshaw provide actionable advice to help Carmen navigate this tricky situation, emphasizing financial responsibility and healthy boundaries within family dynamics.

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Carmen's Financial Dilemma

Carmen begins by explaining her predicament:

Carmen [00:06]: “Hi. I have a difficult decision to make and I wanted to see if I could get some advice.”

She details how, four years prior, she supported her brother by allowing him to live in her home rent-free and co-signing a car loan for him:

Carmen [00:15]: “Until about four years ago, I helped my brother go through, you know, I helped him move into my home, never charged him anything. And I helped him get a car under my credit that he pays.”

However, Carmen’s financial situation has since changed dramatically due to her husband’s career shift, reducing their household income from over $400,000 to $200,000 annually. This change has prompted their need to purchase a new home. During the mortgage approval process, their lender highlighted the existing debt, including the car loan co-signed by Carmen, demanding it be paid off.

Carmen [00:30]: “We want to purchase a home. But when we went through the process of getting approved, the person that went through our debt said, you need to get rid of this debt and pay it off amongst others.”

Despite her brother’s improved financial standing—holding stocks, CDs, and a full retirement—he refuses to take responsibility for the car loan, leaving Carmen with the tough choice of either paying off the loan herself or repossessing the car.

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Expert Advice from Jade Warshaw

Jade immediately addresses the potential financial fallout of Carmen’s options:

Jade [01:57]: “If you do that, that's going to destroy your finances.”

Carmen considers paying off the loan to have the car under her name and repossessing it:

Carmen [01:57]: “No, what I'm thinking about is paying it off.”

Jade clarifies the loan’s specifics:

Jade [02:02]: “How much is it?”

Carmen [02:02]: “It's $11,000.”

Upon understanding that the loan is solely in Carmen’s name and her brother is the sole driver, Jade advises repossessing the car to protect Carmen’s financial well-being:

Jade [02:28]: “Just take the car back and pay it off now.”

She emphasizes that repossessing the car is a fair and necessary step:

Jade [03:10]: “It's just you doing what's fair. Okay, no problem. But the car is in my name and I am willing to pay it. So if I'm paying it, I'm going to take the car back in my possession.”

Jade underscores the importance of ending the current arrangement to prevent further financial and relational damage:

Jade [07:03]: “The longer this goes on, the worse it gets. So put an end to it today and maybe you can still salvage the relationship.”

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Guidance from Dave Ramsey

Dave Ramsey supports Jade’s advice and adds his insights with assertive guidance:

Dave Ramsey [02:36]: “Is he driving the car?”

Carmen [02:23]: “Yeah, he drives the car.”

Dave Ramsey [02:53]: “He’s always made the payments. It doesn't matter, Carmen, it's your freaking car.”

He challenges Carmen to take decisive action:

Dave Ramsey [05:01]: “All right, Carmen, let's start all over. I know how the call started, but I want you to tell us how the call started. What do you want us to tell you today? Because we told you. And now you're trying to talk. You're trying to debate us. This is your car.”

Ramsey encourages Carmen to assert her rights and reclaim ownership:

Dave Ramsey [05:16]: “You need to go over there today. No drama at all, but make it very clear.”

He offers a step-by-step approach for managing the situation:

Dave Ramsey [05:28]: “You called us to say, what should I do? And we both are in agreement. You need to go over there today. No drama at all, but make it very clear. Hey, I brought this to you. You said you didn't want to pay it. I'm changing my lifestyle. Here's where we're at. Financially. This car is an asset. I need it and I'm taking it.”

Ramsey wraps up by reiterating the importance of taking swift action to protect one's financial health:

Dave Ramsey [07:47]: “I'd like to get him on the shows. It is.”

He concludes with a firm recommendation for Carmen to reclaim and sell the car:

Dave Ramsey [07:54]: “Create your free every dollar budget today. The simplest way to budget for your life.”

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Key Insights and Financial Principles

1. Financial Boundaries: Co-signing loans for family members can lead to significant financial strain and complicate relationships. It’s crucial to set clear boundaries to protect one’s financial health.

2. Asset Ownership: Understanding who holds the title to an asset and the responsibilities that come with it is vital. In this case, the car being solely in Carmen’s name places the burden of the loan on her shoulders.

3. Assertive Communication: Carmen is encouraged to communicate her financial limitations clearly and assertively, ensuring that her brother respects the financial arrangement.

4. Asset Repossession: When someone refuses to honor a loan, repossessing the asset is a legitimate step to mitigate further financial damage.

5. Financial Prioritization: Prioritizing household financial stability over familial agreements is essential, especially when significant life changes, like purchasing a home, are at stake.

6. Budgeting Tools: Tools like the EveryDollar app can simplify budgeting processes, making it easier to manage finances effectively.

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Conclusion

In this episode, Carmen confronts a challenging financial predicament stemming from her decision to co-sign a car loan for her brother. With guidance from Dave Ramsey and Jade Warshaw, she is advised to take ownership of the situation by repossessing the car and selling it to alleviate the financial burden. The experts emphasize the importance of setting financial boundaries, assertive communication, and prioritizing personal financial stability over familial obligations. By taking decisive action, Carmen can safeguard her financial future and potentially preserve her relationship with her brother by addressing the underlying issues transparently.

Notable Quotes:

• Carmen [00:14]: “It's a financial decision.”
• Jade [01:57]: “If you do that, that's going to destroy your finances.”
• Dave Ramsey [05:16]: “You need to go over there today. No drama at all, but make it very clear.”
• Jade [07:03]: “Put an end to it today and maybe you can still salvage the relationship.”
• Dave Ramsey [07:54]: “Create your free every dollar budget today. The simplest way to budget for your life.”

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This detailed summary captures the essence of Carmen’s financial struggle, the expert advice provided, and the key financial principles discussed, making it a valuable resource for listeners and non-listeners alike.

Transcript

[Dave Ramsey]

Brought to you by the EveryDollar app. Start budgeting for free today.

[Carmen]

Hi. I have a difficult decision to make and I wanted to see if I could get some advice.

[Dave Ramsey]

You can.

[Carmen]

It's a financial decision. Until about four years ago, I helped my brother go through, you know, I helped him move into my home, never charged him anything. And I helped him get a car under my credit that he pays. My financial situation has changed a lot since and we went from being a family that was making over $400,000 a year to half of that this year because my husband made a change in careers that will end up paying off and it will be a life changing move. But for now it is not. We had to move and now we want to purchase a home. But when we went through the process of getting approved, the person that went through our debt said, you need to get rid of this debt and pay it off amongst others. And I went to my brother, right now he's fully recovered. It's been four years. He has stocks, he has CDs, he has a full retirement. He makes commissions and is living a good life. And he basically said, no, not going to take that upon my credit and I don't, I'm not going to pay off the car. So I'm in have to make the tough decision to either pay it off myself and put it under my name and then repo it and sell it and send him whatever's left off from paying myself back or you can't repo.

[Jade]

It because if you do that, that's going to destroy your finances.

[Carmen]

No, what I'm thinking about is paying it off.

[Jade]

How much does it, how much is it?

[Carmen]

It's 11,000.

[Jade]

Okay. Yeah.

[Carmen]

And once it's under my name going and having a company pick it up because I'll be the owner of the title.

[Jade]

How are you going to put it under your name? How is that? Because it's his loan that, that you co signed, right?

[Carmen]

My loan? No, it's under my name fully.

[Dave Ramsey]

Is he driving the car?

[Carmen]

Yeah, he drives the car.

[Jade]

So it's under your name fully. Just take the car back and pay it off now.

[Carmen]

Well, it's costing a lot of drift in the family. My mom.

[Jade]

It already has.

[Dave Ramsey]

Yeah.

[Carmen]

For just offering.

[Dave Ramsey]

Hold on. Carmen, did you just hear what Jade said? Meet everydollar budgeters, Christy and Steve. Their life is chaotic, but their money is simple because they budget with every dollar. Budgeting with the spreadsheet took a ton.

[Carmen]

Of time, but now with every dollar I can do a budget in five minutes.

[Dave Ramsey]

And tracking purchases is just as simple.

[Carmen]

It's so freeing to know exactly where your money is going. It just takes that stress out of the day to day life.

[Dave Ramsey]

You got this. Hannigan family, every dollar. Create your free account today. Did you just hear what Jade said?

[Jade]

It's our. The damage you're worried about being done has already been done. And so for you, the best thing to say is you asked him, hey, can you pay this? You're driving the car. He said no. So then the only fair thing to do and that's. That's it. You're just doing what's fair. Okay, no problem. I. If you don't want to pay it, that's fine. But the car is in my name and I am willing to pay it. So if I'm paying it, I'm going to take it back in my possession. That is not mean, Carmen. That is not a bad sister. That is just you doing something that is very normal and fair by saying, if I'm paying for a car that's in my name, I'm going to be the one owning it and driving.

[Dave Ramsey]

He's delusional. Your brother's delusional and he's manipulative.

[Carmen]

He. Yeah, that is definitely true because he has the money to pay it off, but he has been making the payments monthly himself. So he's like, I want to continue to make payments monthly because I want to.

[Jade]

Then he needs to go. Then he needs to go rent a car. He needs to go over to Avis or Thrifty or, you know, dollar and rent a car. Because that's what he's doing. He's paying payments on something that's not in his name that he's never going to own.

[Dave Ramsey]

What's the car worth if you were to sell it today?

[Carmen]

So I looked up the trade in value, not trade.

[Dave Ramsey]

I'm not interested in trade in. That's always a bad deal. And you don't need to do that. What is the car worth? Kelly Blue Book today. If you were to sell it.

[Carmen]

Private seller 19,000.

[Dave Ramsey]

I. I would go get that car from. From your brother today and sell it instantly, instantaneously.

[Jade]

You only. Yeah.

[Carmen]

Wow.

[Dave Ramsey]

Well, what?

[Carmen]

He's always made the payments.

[Dave Ramsey]

It doesn't matter, Carmen, it's your freaking car.

[Jade]

He rented the car from you. That's what he's been doing.

[Dave Ramsey]

It's your car. True or false?

[Carmen]

Yes, it is. On their money.

[Dave Ramsey]

All right, Carmen, let's start all over. I know how the call started, but I want you to tell us how it Started. What do you want us to tell you today? Because we told you. And now you're trying to talk. You're trying to debate us. This is your car.

[Carmen]

Yeah, you're right.

[Dave Ramsey]

You want to get. I know I'm right.

[Jade]

Because then, all the way. All we say then is, okay, just let the guy keep it.

[Dave Ramsey]

Yeah. I mean, bye.

[Jade]

You know, that's not it.

[Carmen]

I can't do that. I can't do that.

[Dave Ramsey]

Why? Why can't you let him continue in this current arrangement? Tell yourself.

[Carmen]

Because. Because I have two kids and they need a home.

[Dave Ramsey]

There you go, sweetheart. You know what you are supposed to do. You called us to say, what should I do? And we both are in agreement. You need to go over there today. No drama at all, but make it very clear. Hey, I brought this to you. You said you didn't want to pay it. I'm changing my lifestyle. Here's where we're at. Financially. This car is an asset. I need it and I'm taking it. And if you don't want to play ball, I'm going to call the authorities because it's already ugly. You're being ugly about this, little bro, or big bro, whatever his deal is. And I would say I'm taking the possession of the car and then I'm going to sell it. So at which point he gets to. He gets to decide, oh, whoa, whoa, whoa. I want the car. Then you go. Fine. $11,000. Thank you very much.

[Jade]

Yes, it's worth 19.

[Dave Ramsey]

Big Bro, little bro. But I'll give it to you for the fabulous price of $11,000.

[Jade]

Oh, see, and that's too nice.

[Carmen]

Well.

[Dave Ramsey]

But I'm trying to make it clear.

[Jade]

I know you are. I know you are.

[Dave Ramsey]

I don't disagree with you either. If you say, well, pony up 19 or even 15.

[Jade]

Come on now.

[Dave Ramsey]

Yeah, I liked it that Jade's negotiating with me. We're negotiating on your behalf, Carmen, on my behalf.

[Jade]

We want you to. We want you to be respected in this. And that's what it boils down to, is this is a disrespectful transaction. And if you let it continue, if you let it continue, he's not just disrespecting you, you're disrespecting yourself at that point.

[Dave Ramsey]

I'd like to get him on the shows. It is.

[Carmen]

I call it abuse.

[Dave Ramsey]

Because I wish we could third party call him in right now because I would go, hey, dude.

[Jade]

Yeah.

[Dave Ramsey]

You're treating your sister really poorly. You're showing a real lack of responsibility. And you want your cake and eat it, too. She provided the cake, now you're eating it. And that stops today. So, Carmen, you know what to do. We told you exactly what to do. Now, we didn't say this was going to be fun, but as Jade pointed out momentarily just a moment ago, it's already not fun. So let's go ahead and rip the band aid off and take possession of the car. Sell it, you pocket some cash, and now we're moving forward. Jade, final word on that.

[Jade]

The longer this goes on, the worse it gets. So put an end to it today and maybe you can still salvage the relationship.

[Dave Ramsey]

Create your free every dollar budget today. The simplest way to budget for your life.