BK affecting a co-signer

[toomuch]

Most of you probably know it, but if someone has co-signed for you for anything, like a car (as my stepfather did for me recently), and you file BK, it does show on their credit report that you filed BK.
So now I am in a real panic. I could pull resources and pay this car off, but afraid trustee would take it to sell.

I absolutely can not let this affect my stepfathers credit. So, I either sell it, take a loss on it and be without a car......or.......I don't know what else. I have to file BK soon.

Toomuch

[emoney]

Refinance the car without your relative, or sell it and pay off loan are the only two ideas I have.
regards,
emoney

[kl030505]

Most of you probably know it, but if someone has co-signed for you for anything, like a car (as my stepfather did for me recently), and you file BK, it does show on their credit report that you filed BK.
So now I am in a real panic. I could pull resources and pay this car off, but afraid trustee would take it to sell.

I absolutely can not let this affect my stepfathers credit. So, I either sell it, take a loss on it and be without a car......or.......I don't know what else. I have to file BK soon.

Toomuch

Can you afford to reaffirm the car loan? I would think re-affirming wouldn't negatively affect anything, but I don't know for sure.

[toomuch]

Can you afford to reaffirm the car loan? I would think re-affirming wouldn't negatively affect anything, but I don't know for sure.

Yes, it still shows on co-signers credit. M parents have perfect credit but I fear this would at the very least cause their cc interest to rise, although they pay it in full each month. They aren't rich and can't help me much, so co-signing for me to get a decent car was a big deal

I just put the car up for sale in 3 publications. I pray I can sell it asap, pay the loan off, even if I have to put money with it.

Then I'm back to square one. No car. Whatever. I have to do it. Plain and simple.

Toomuch

[FreshLikeADaisy]

Toomuch, the only other thought I have is to simply wait to file until you can either refi the car on your own or sell it. I understand about the perfect credit thing; I would not have filed myself if it meant trashing someone else's credit beyond my own, and yes, that "universal default" thing might be enough to cause a spike in their interest rates, depending on how that bank has it written into their agreements.

Do you have a good payment history with the bank that financed the car, good enough that you could re-approach them to finance the vehicle in your name only? If the car loan was very recent, that may not be an option either.

I am really sorry. You've gotten everything together for bk and now... All dressed up and nowhere to go, in a way. I appreciate your integrity in wanting to save your parents' credit, and I find that very honorable. Good luck!!!

[toomuch]

Toomuch, the only other thought I have is to simply wait to file until you can either refi the car on your own or sell it. I understand about the perfect credit thing; I would not have filed myself if it meant trashing someone else's credit beyond my own, and yes, that "universal default" thing might be enough to cause a spike in their interest rates, depending on how that bank has it written into their agreements.

Do you have a good payment history with the bank that financed the car, good enough that you could re-approach them to finance the vehicle in your name only? If the car loan was very recent, that may not be an option either.

I am really sorry. You've gotten everything together for bk and now... All dressed up and nowhere to go, in a way. I appreciate your integrity in wanting to save your parents' credit, and I find that very honorable. Good luck!!!

Thanks FreshDaisy,
The attorney I talked to TODAY made me feel so much better. I have hope. We talked on the phone for an hour and I have an appt with them next Thursday.
She asked if I could get my stepfather to put the car in his name but I just can't do that. They are in their mid 70's (not saying that's old) but they have been dealing with Mom's cancer for a whole year now. They get confused about things and make a bigger deal that what it is and so forth.

Actually, the phone consult I had today was more thorough than any I've had so far. I'll post about that in a different thread.

Toomuch

[FreshLikeADaisy]

Oh, wonderful!!! I'm so glad you finally got some good news.

Yeah, I understand about that whole older people befuddlement thing... I'm dealing with that myself and it's very hard sometimes. And I also know that if you really wanted to, you could convince them to do whatever you wanted, if you had the stomach to manipulate them into it. (That's part of what is making my life hard, keeping my mother from being taken advantage of by certain predatory family members in just that way: she gets all excited over stuff that doesn't matter and then hands her credit card over without blinking an eye... *sigh*) But I think you're a *jewel*, for looking out for them and not just doing what's right for you right this minute. It takes a strength of character and a clarity of conscience to CHOOSE to take a hit so that someone else doesn't have to, and it's not all that common: if integrity were actually cheap, more people would have it. Integrity and honor are like anything else: the real thing is very expensive and there are plenty of lookalikes. But you have it. Good on you!!!

Good luck!!!!

[Lindsay]

TooMuch, my parents are like that too. I can explain something a hundred times and they still don't understand (or at least pretend not too). Some places will do refinances with a low credit score, but the interest rate wouldn't be good. If I were you, I'd probably try a few places like that and see what the payment/interest rate would be. Otherwise, I'd sell it and try to scrape together $1000 or so to buy a decent used car. You can find good deals out there. We sold a minivan about six months ago to someone for $375. It ran perfect and we were at McDonalds getting $1 fish sandwiches last Friday and we saw the van and its new owner. She says it runs great! We had to get rid of it because our town has a law that any car in the driveway has to be licensed and insured and I don't know how to drive so it wasn't being used. My husband works in a shop and the lady came in and her car was going to cost a huge amount to fix (like $2000), way more than it was worth. So he suggested she look at our minivan and she junked her car and bought it. We sold it to her cheap, but it had hardly any rust and was in great running condition. That's about the only good thing I can say about my husband; he can keep an old car in great shape being a mechanic. I see alot of relatively nice cars with for sale signs in our area around $1000 or less.

You should try listing your car on Craig's List in your area. It's free and I hear alot of people have success selling it that way. That's also a great place to look for an inexpensive car if you decide to sell yours.

[toomuch]

Oh, wonderful!!! I'm so glad you finally got some good news.

Yeah, I understand about that whole older people befuddlement thing... I'm dealing with that myself and it's very hard sometimes. And I also know that if you really wanted to, you could convince them to do whatever you wanted, if you had the stomach to manipulate them into it. (That's part of what is making my life hard, keeping my mother from being taken advantage of by certain predatory family members in just that way: she gets all excited over stuff that doesn't matter and then hands her credit card over without blinking an eye... *sigh*) But I think you're a *jewel*, for looking out for them and not just doing what's right for you right this minute. It takes a strength of character and a clarity of conscience to CHOOSE to take a hit so that someone else doesn't have to, and it's not all that common: if integrity were actually cheap, more people would have it. Integrity and honor are like anything else: the real thing is very expensive and there are plenty of lookalikes. But you have it. Good on you!!!

Good luck!!!!

Gosh Fresh, I needed that!! Seriously, I do have a family member who manipulates both of them. I am a middle child and I honestly believe I am a stronger person because I wasn't coddled through life like my siblings. Too bad I didn't follow all of Mom's advice. I certainly wouldn't be in the mess I'm in.

I promised my stepfather that this transaction would not hurt his credit in any way and I would make every payment. No way would I bring them any more grief. The finance company sends him and me a statement each month. It really, really bothers them that they get any correspondence at all. It's like junk mail or something. The finance company says they have to send it. I tell them to just junk it. We have this conversation often and I've only had the car 3 months.

Toomuch

[toomuch]

TooMuch, my parents are like that too. I can explain something a hundred times and they still don't understand (or at least pretend not too). Some places will do refinances with a low credit score, but the interest rate wouldn't be good. If I were you, I'd probably try a few places like that and see what the payment/interest rate would be. Otherwise, I'd sell it and try to scrape together $1000 or so to buy a decent used car. You can find good deals out there. We sold a minivan about six months ago to someone for $375. It ran perfect and we were at McDonalds getting $1 fish sandwiches last Friday and we saw the van and its new owner. She says it runs great! We had to get rid of it because our town has a law that any car in the driveway has to be licensed and insured and I don't know how to drive so it wasn't being used. My husband works in a shop and the lady came in and her car was going to cost a huge amount to fix (like $2000), way more than it was worth. So he suggested she look at our minivan and she junked her car and bought it. We sold it to her cheap, but it had hardly any rust and was in great running condition. That's about the only good thing I can say about my husband; he can keep an old car in great shape being a mechanic. I see alot of relatively nice cars with for sale signs in our area around $1000 or less.

You should try listing your car on Craig's List in your area. It's free and I hear alot of people have success selling it that way. That's also a great place to look for an inexpensive car if you decide to sell yours.

Hi Lindsay,
What a nice guy your hubby is, and you too of course. That was a very kind thing he did, selling the van to a damsel in distress. I should be so lucky.

I did list in on Craigs List. I am selling it at KBB private owner value and hope I get it. It's a nice car.
The loan on it now is horrible. I think it's called a simple interest, or so I was told. Out of the $326 payment, only $113 went to principal so I guess they will get their interest up front. I may try to get a refi, but I've only had it 3 months and my credit certainly hasn't gotten any better. I'll see if I get any hits on it.

I like the dollar fish sandwiches too. Gotta love those deals

Toomuch

[CindyLou]

check with the lender because as far as I know, if its reafirmed and paid then it won't affect them negatively.

[Lindsay]

I always thought that too, Cindy. I thought that the negative impact of having a co-signer is that that after the BK, if the person with the loan doesn't pay, they come after the co-signer for the money. It wouldn't seem right to list a BK on the cosigners credit if he didn't file BK himself and the account wasn't overdue. Does anyone know if they actually make a BK notation on the cosigners credit report?