If the car that you signed a loan for where your grandmother was the co-signer was repossessed, the lender can very well sue you and your grandmother for a deficiency judgment on the vehicle after it has been auctioned off.The amount of the deficiency judgment will be the difference between what the car was sold for and the amount on the loan plus towing fees, storage fees, accrued interest and the auction fee.As far as protecting your grandmother from a judgment concerning a likely lawsuit by the lender, I suggest that you enter into a written agreement with the lender and try to pay down the amount owed. From what you have written, your grandmother could very well be sued for the deficiency. I suggest that you consult with an attorney that represents creditors such as you.