Answered on Nov 21, 2010
One other thought is that you can sometimes negotiate with certain companies. If you give them something they may work with you to avoid obligation related to the whole amount. You could offer some type of lump sum payment for a release of the obligation. However, it may be that you no longer wish to assist the person.
I have had a similar situation with a car loan and worked out a release from the bank for the guarantor and a repayment agreement for the guarantor from the initially obligated party. It seems like the amount in this case may be two high for that type of resolution. If it was not, you should have an attorney do the negotiating and paperwork to be sure that all matters are considered. Also, you would have to assess the likelihood of being repaid.
Another thought, is that sometimes the bank releases collateral, somehow shifts responsibilities under the contract, waives provisions or enters a new contract which can be used as an argument to release you from your responsibilities. Again an attorney would be needed to review this issue and to possibly litigate it.
Standard advice – Contracts should be review by an attorney.