I'm a cosigner on an auto loan. The signer refuses to pay, release the vehicle or refinance. Do I have any options?

It sounds like you're what the law calls an "accommodation party" to the loan transaction -- essentially having lent your credit-worthiness to the borrower while getting no benefit yourself (except for the satisfaction of enabling the borrower to make a transaction that he or she likely couldn't have made herself).

There are specific provisions in the Texas version of the Uniform Commercial Code that govern your situation -- a whole bunch of them, which makes your legal rights, remedies, and liabilities unfortunately complicated.

As an accommodation party, you're a "secondary obligor"; the borrower who you co-signed for is the "primary obligor." But as a practical matter, that usually only slows the lender down just a little bit. Most lenders require that co-signers guarantee not just "collection," but "payment." Either way, the lender can still turn to you to demand performance if the primary obligor ultimately fails or refuses to pay. But if you've guaranteed payment, then the lender doesn't have to sue the borrower separately or first, for example, nor even to show that such a suit would have been worthless (e.g., because the borrower has become insolvent or can't be served with process). And if you're the more attractive (meaning "judgment worthy," i.e., able to pay a judgment based on your other assets that could be seized and sold) lawsuit target -- as is typically the case, since the lender was willing to lend based on your credit but not on the original borrower's alone -- the lender may even choose to sue ONLY you, leaving you to drag the original borrower back into the suit to enforce your rights against him.

If you DO pay, then your payment extinguishes both your and the original borrower's contractual liability to the lender. The lender can only get "one satisfaction," and can't continue pursue either you or your friend after one of you has paid in full. Similarly, the lender -- if the lender pursues you as co-signer -- has to credit you with whatever payments the borrower made before defaulting. If the lender has already repossessed and disposed of the collateral (the car), then the lender has to credit the net proceeds (after expenses) realized from that process toward both your and the borrower's further obligations to the lender. Unfortunately, if the payments made by the borrower plus the net proceeds from the repossession doesn't generate enough in proceeds to pay off the borrower's remaining debt, you're still on the hook to the lender for the remaining balance.

Similarly, if the borrower has other legal defenses that he could have asserted against the lender's claims, you're entitled to assert most of those when the lender sues you. (If the loan violated state usury laws, for example, you could argue that.)

You may have a few special defenses against the lender unique to someone in your situation. If the lender has acted unreasonably with respect to the collateral in a way that destroyed or reduced its value, you may be able to get some further credit for that.

Most of your rights, however, are vis-a-vis the person you co-signed for.

The fact that there was "no consideration" between you and the borrower -- that you got nothing except satisfaction from seeing him get the loan -- is not a defense that you can assert against the lender. But neither is it a defense that the borrower can assert against you, if indeed you either voluntarily pay on his behalf when demand is made of you, or you're compelled to pay because the lender sues you.

If you DO pay -- either voluntarily or through the compulsion of a lawsuit and judgment -- you are entitled, in theory, to get your money back from the borrower, either via a "third-party claim" in which you drag him into that same lawsuit or a new lawsuit that you file against the borrower. And likewise, if you pay, you may acquire rights to the car.

Because this is a tangled maze of laws, you probably need a lawyer to represent you. Good luck!

I was running out of space with that answer -- the 4000 characters Avvo gives aren't enough to fully analyze your rights and obligations even as a general matter. But let me throw in some practical advice:

DON'T IGNORE THIS! Get involved in the discussions with the lender!

If you just stand by and watch the borrower go down in flames, you may be losing your best opportunity to reduce your ultimate liability and prevent harm to your credit standing.

In a compulsory foreclosure, for example, the lender -- although theoretically obliged to act in a "commercially reasonable" fashion -- is very, very unlikely to actually get the best possible price for the car, and the lender is also likely to be less sensitive to avoiding expenses than you would be. By stepping in and basically "buying the lender out" -- paying the debt to the lender, but then stepping into the lender's shoes so that YOU can do the repossession -- you may both save your credit standing AND get a much better disposition of the car. You may also be able to reduce other fees and penalties that would have been triggered in a total default and lender-managed repossession.

And even though you're equally on the hook with the borrower, don't assume that you can't negotiate with the lender. There are limits to what the lender is going to be willing to do: They undoubtedly assume that you're a better target than the borrower you co-signed for, so their "worst-case" scenario against you is not as bad as against that borrower. And against either of you, they'd be entitled to all sorts of fees and penalties and prejudgment interest and attorneys' fees (assuming a typical lender-biased contract). BUT MONEY TALKS. Lenders would far, far rather get cash in hand, even if it's not necessarily 100 cents on the dollar, than try to sue in order to get the difference between what the foreclosure produced and the further amount they could squeeze out of the borrower and/or you.

What I've presented here are guesses based on what the typical paperwork says. You need a lawyer to confirm that what's actually binding in your situation is or isn't typical. And you need a lawyer to help you then confirm what your rights are against both the lender and the borrower -- to help you analyze the potential defenses, for example. Once you know your specific rights, though, you may also want to pay a lawyer to act as your negotiator and advocate, or to represent you in court proceedings if need be. But there's also the possibility that once you've paid a lawyer to help you confirm your specific rights, you could do some or all of that yourself -- including negotiating with the lender and/or representing yourself in small claims court (if there's $10k or less still owed).