I filed Chapter 7 - Codebtor not making car payments

[tired_of_debt]

Hi...I live in Illinois. I am a cosigner on a loan for a van and I agreed to surrender the van in a Chapter 7 proceeding before the new laws. It is my understanding that the codebtor has not been making the payments (last payment I made was July 2005). Can the finance company repo the van before the BK is discharged? Is he still responsible for the debt if they do? Is he given notice or opportunity to take over the debt after not making payments for so long? I have mega medical bills but I made all the payments that were made on the van and never even drove it. He has been fairly irresponsible all his life. What is the best and worst case scenario?

[bkfiler]

Hi...I live in Illinois. I am a cosigner on a loan for a van and I agreed to surrender the van in a Chapter 7 proceeding before the new laws. It is my understanding that the codebtor has not been making the payments (last payment I made was July 2005).

Can the finance company repo the van before the BK is discharged?
you mean your BK? if you listed it then they cant repo it until the discharge and stay is done. unless they file for a lift of the stay.

Is he still responsible for the debt if they do?
well i guess you wont be responsbile for it. thats the good part. good questions of wether he will be responsible for it. it seems to me they can go after him to collect it. i doubt your bk will help him with that.

Is he given notice or opportunity to take over the debt after not making payments for so long?
no idea.

I have mega medical bills but I made all the payments that were made on the van and never even drove it. He has been fairly irresponsible all his life.

What is the best and worst case scenario?
for who, you? you wont owe. he can keep making the payments and keep it if he wants if they let him. why do you care?

maybe post more about the facts of your case and the value of the van and balance owed, late amounts owed etc.

[tired_of_debt]

...I read somewhere...

That a codebtor on a loan can still be made to pay for a car EVEN if it is repossessed and sold if the sale price does not match what is owed on the vehicle...and Illinois law says that if that happens, in order to get it back if it is repossessed, 30% of the debt has to be paid and the codebtor has to pay all back payments, interest, late charges, etc. If 30% has not been paid into the loan, then the entire balance is due. Just morbid curiosity, I guess. That...and I worry that he will try to do me harm if they take it and he can't get it back.

[bkfiler]

well, write a letter about it and put it in your safe. tell others as well.

until i hear from someone that knows i still think he would owe it and they can take it from him. they sure ant going to let someone else keep the car when they own it. unless its not worth it for them to take it.

if you provide balances, worth of car and the like then maybe it would help when someone tells you what they had happen to them. there is a big difference due to numbers since that is what this is all about.

[pink_amulet]

That a codebtor on a loan can still be made to pay for a car EVEN if it is repossessed and sold if the sale price does not match what is owed on the vehicle...and Illinois law says that if that happens, in order to get it back if it is repossessed, 30% of the debt has to be paid and the codebtor has to pay all back payments, interest, late charges, etc. If 30% has not been paid into the loan, then the entire balance is due. Just morbid curiosity, I guess. That...and I worry that he will try to do me harm if they take it and he can't get it back.

It is up to the finance company also! I live in IL and I have known the situations about 3 cars being repoed. I had two friends that had their cars repoed, and they had to pay the enitre loan in order to get their car back. One was almost done with the loan, and one had just started their loan. My ex had to pay the BALANCE of the loan (he was in the middle of his loan) before they gave it back to them, then he still had to pay the tow, and storage fees, so it was not worth it, in the end.

Since you are the co-signer you should be able to acess the info and talk to the financing company, ask them how much is paid off, and what are the options...it won't hurt to ask!!

Good luck

pink

[tired_of_debt]

more details

We got the loan on the van in 2004...payments started in December 2004. I made all the payments on the van up until he and I split. Last payment was July 2005. He has made one payment since that time and has been driving it all this time. Probably still owes in excess of 20,000.00 on the loan. The loan is through HSBC Auto and the interest rate is outrageous, but neither of us had great credit. The finance company will NOT speak to me in any fashion (barred I guess because of the stay), but I just wondered if they could take the van before my BK is discharged or if they will wait until everything is said and done...or maybe not repo the van at all. I had no idea if they will contact him to allow him to take over the van in his name, but I suspect they won't since he has not been making the payments. He's a time bomb and I am just a bit worried. Thanks for responding. I am chewing my nails until this is over.

[StaciMM]

The automatic stay means they cannot repo it, and they can't pursue you for any balance-now or later. They can still go after the other person, though they may not try to collect until discharge. Once discharge happens, they can pick it up at any time, and its up to them whether or not they give notice.

They can & will pursue the other party for the balance owed, after deducting what they get for selling the van. They can also keep charging interest, late fees, etc.

[bkfiler]

thanks staci, it seems like ive been asking that question alot about two people on the loans and one filing bk, etc and not getting answers.

now i know. thanks.

also, i bet you are right that they can not repo it until after the stay. it would be like taking it from the bk filer. and unless they lift the stay so they can come get it then they cant come get it. if however she agreed to give it up and thats documented then i bet they can lift the stay real easy and not have to wait.

[StaciMM]

If the vehicle is behind, then lifting the stay isn't an issue. (All they have to do is file a motion & have a hearing.) I have never heard about the motion being denied... My guess is that most are willing to wait, rather than pay an attorney to file the motion and represent them at the hearing.

[Minnymouth]

Yes, why go to the expense of filing for a Motion to Lift Stay when its only a 60 day wait and they can send out the repo man......
Yes, the other co-debtor will feel the pain of "paying the balance due"....
You don't keep if you don't pay...............
REPO MAN will visit you.....
Followed by a law suit to the other codebtor...

Smile and "wish him luck"...................lol

[tired_of_debt]

Minny, Thanks...I hate to sound like a bit**, but it couldn't happen to a nicer guy. When the IRS finally catches him (he owes 20,000) for one day, his fancy PhD won't amount to a hill of beans. Allegedly brainy, no common sense

[tired_of_debt]

Oops...I meant for 1 year (has not filed taxes since 1997 and he HAD the money to pay). Jerk.