Co - buyer on car

[Lisa85]

I am planning to file chapter 7 bk within th next 4 weeks. Me and my boyfriend bought a car in may 08 . He is the buyer on the car and I was put on as the co-buyer due to my credit but more income gave as more of a chance to get the loan. We currently owe $4800 on the car however the kelly blue book value in good condition for the vehicle is only $1000. The monthly payment is is 350 per month. I can only assume that the will still go
after my boyfriend for the remainder of the loan if I add the car to my bankruptcy. If I keep the paying the payments a leave it off the bk will that help me when rebuilding my credit after the bk? Any feedback is much appreciated.

[AngelinaCat]

Lisa: first, welcome to the forum.

To answer the immediate question, yes. You and BF co-signed, so you are both responsible.

Even if you both returned the vehicle to the lender, and they sold it at auction, you would be responsible for the difference. If one of you files BK and the other does not, the other party will be sued and a judgment for the difference will be put in place.

If you keep the vehicle, but sign a reaffirmation agreement, and somewhere down the line you both can’t make the payments, then the scenario will play out as above. The car is sold at auction, and the one not filing BK is stuck with a judgment for the difference.

If you keep the vehicle, but DON’T sign a reaffirmation agreement, and keep the payments on the car on time, you won’t have a problem. But in this scenario, if you fall behind in your payments, and have to return it to the lender, you will not be penalized for the difference.

Does this make sense?

[Lisa85]

Thanks

Yes this makes alot of sense. After reading the forum for a few days I had an Idea , but you made it very clear. So In this case when I do file my bk will I be forced to sign the reaffirmation letter or only if the loan company requires me to sign it?

[AngelinaCat]

Yes this makes alot of sense. After reading the forum for a few days I had an Idea , but you made it very clear. So In this case when I do file my bk will I be forced to sign the reaffirmation letter or only if the loan company requires me to sign it?

Depending on your District and / or your financial insitution, you will sign or not. If neither one requires the reaffirmation, I would ignore it. You and BF MUST keep the payments current in order to do this. [make the ride-through work]

In the event your financial insitution makes you sign the agreement, then you will still be doing the same as the above scenario, but if you have to walk away from the car, you will be stuck with the difference.

Good luck to you~~

[Lisa85]

Thanks !