What happens to co signers in a bankruptcy? I helped finance my sisters car for her and my mom cosigned. I plan on doing bankruptcy soon but her car will be paid off next month. It is a 96 Camry by the way. Once it is paid off I will let it go to her name since it is her car that she has always paid for. But also my mom cosigned for my truck and the balance is about 12,000 on it but I had a wreck and it had some frame repairs and according to kelly blue book it is worth about 6,000 now so I am interested in a 722 redemtion loan even though the intrest is high with that type of loan. But I cant find any straight answers to what happens with co signer situations like mine.
-
-
If the vehicle is paid off, the cosigner is uneffected...the loan is finished so there is no further liability, so there should be no issues with the Bk.
If you reaffirm or redeem a vehicle and the payments are current, the BK should not effect the cosigner in any way.
If you default, or let the car go in bankruptcy, then the cosigner becomes liable and for the debt. -
Let me make sure we understand -- the Camry -- the loan and car is in YOUR name, and your mom is the cosigner -- but your sister has made the payments?
If it is in YOUR name, regardless of who made the payments, I would think that would be a problem.
Maybe someone with more knowledge than me can help, I just wanted to make sure we were reading that correctly.
Good Luck!Comment
-
Opps, I didn't even catch that...it sounds like NissanMan is the one considering BK, and he helped finance the two cars. The Camry should be fine as it will be paid off. As for the truck, my post above still stands. If you default, the cosigner becomes liable. If you discharge the debt in your BK, the cosigner becomes liable. If you redeem, the car gets paid off, and the cosigner is released from liability.Originally posted by wrinkleigh View PostComment
-
I need some clarification too.
Sounds like from the post, NissanMan is a co-owner on the Title of the Camry with Sister.
NM said after Sis makes the final payment, he will let the car "go into her name since it is her car that she's always paid for."
If NM is a co-owner of the car, that could be seen as Transfer of Assets that the Court may not like.Filed Ch 7 - 09/06
Discharged - 12/2006
Officially Declared No Asset - 03/2007
Closed - 04/2007
I am not an attorney. My comments are based on personal experience and research. Always consult an attorney in your area to address concerns related to your particular situation.
Another good thing about being poor is that when you are seventy your children will not have declared you legally insane in order to gain control of your estate. - Woody Allen...Comment
-
Sinkingfast -- that is what I was worried about also -- I just didnt know how to put it! Thanks!Comment
Comment