Just got blindsided by something, quite nervous, possibly screwed big time. Help?

[hardwayway]

• If 2 people sign and the car is turned in with a discharge, is the other still responsible for the debt?
• Why was this notice sent to me with the "... we understand that you're filing chap 7" marked when I'm not filing?
• Is there anything I can do to protect myself from this?

Any and all responses will be GREATLY appreciated!

[StartingOver08]

Yes, if two people sign the note and one files BK and is successfully discharged, the other is responsible for the debt. This is why lenders get a co-signer whenever possible, they "double" their odds of collecting the payment. In the original agreement/note (if you still have it in your files) there is most likely a reference to collecting "jointly and severally" which means that the debt can be collected from both parties on the note or either party on the note.

The notice was sent to you because the creditor is obligated to notify you of the sale and the proceeds from the sale. The rules vary according to which state you are in, so check your states statutes.

As to protection: Don't co-sign for anyone. It's too late for this one, but maybe you can work out an arrangement with the OC for the deficiency balance. Maybe someone else here has a better idea.

[Mensa1]

Dear hardw:

You are getting a business lesson here and the tuition is unfortunately going to end up costing you a lot of money, not to mention the hit on your credit.

When two people sign a note, which is what happens when a co-signor enters the picture. You are each 100% responsible for repayment in full. Doesn't that add up to 200%...? Not if the first payor pays, but in this case she didn't so they are now looking for you to fulfill your promise on the front end, which was... if she fails I will take care of it". There was no fine print about breaking up, moving away, babies, BK, etc... it was merely if she doesn't, you will.

No more to the story... except DON'T CO-SIGN for anyone unless you expect to pay off the balance youself, and in full. If you don't have to, then you will be pleasantly surprised.

BTW, just so you know the terminology, this is called: Joint and Several Liability. you are each jointly responsible and each individually responsible. The only good news is that he Bk won't be effecting you at all, even though you were on the same auto loan.

[SMinGA]

They would have sent the notice to both on the loan - and the BK comment was directed at your ex.

They are giving you a chance to 'buy' the car for its current balance before they sell it at auction. If/when that happens, they'll apply the sale price to the balance owed and then pursue you to collect what remains.

[DYLAN150]

So she has been making payments for five years and still owe's more than 13K? Just wondering if the bank ever sent you any kind of late payment notice? This same thing happen to me back in 1989. ( x wife) My attorney sent the bank a letter asking for a full accounting of each payment, copies of all late notices, etc etc, and I never heard from the bank again. It disappeared from my credit report too. You should have been notify that she filed for bankruptcy because you were a co-signer. See a good attorney.

[AngelinaCat]

She probably refinanced that loan several times over the years. This happened to us when my husband co-signed a car loan for an acquaintance 'down on his luck.' He made payments for several months, refinanced a couple of times w/o our knowledge, then eventually he defaulted and the loan company started coming after us. We made this person return the car, and as we were in the process of filing Ch7, anyway, added this to the list. Our responsibility for a car we never owned or wanted, was discharged, and he got stuck with the judgment for the difference of about 13K after the car was sold at auction.

As StartingOver08 said, Never, EVER, cosign a loan for anyone, no matter who it is.

[DYLAN150]

Cat: You got that right, I signed for my son when he was 19 and I ended up making the payments so he didn't screw my credit up. Never again. I took a business class one time and the first words out of the instructor's mouth was never co-sign for a loan and never loan relatives money. I am guilty of both.

[hardwayway]

Lesson very much learned.

Thank you for the responces!

I was kinda hoping that there would be some recourse since I wasn't notified that she turned the car in, yet I'm on the note.

[keepinitreal]

She probably refinanced that loan several times over the years. This happened to us when my husband co-signed a car loan for an acquaintance 'down on his luck.' He made payments for several months, refinanced a couple of times w/o our knowledge, then eventually he defaulted and the loan company started coming after us.

I'm surprised when a person refinances a car loan without the original co-signer's signature the second time, that the co-signer is not let off the hook if the other person defaults. That sucks.

[justbroke]

I was kinda hoping that there would be some recourse since I wasn't notified that she turned the car in, yet I'm on the note.

There's no recourse that I know of, but administratively, the debtor (your ex) was required to list you as a co-debtor on Schedule H of the bankruptcy petition.

Now, if she actually re-financed it, as Mrs. Cat wrote, how did your name get back on the loan? I would go back through and make sure that you, in fact, signed up for that specific loan.

[DYLAN150]

I don't know much about Pacer but couldn't he check her bankruptcy out on Pacer for a few bucks? See if he was listed, amount of truck balance, etc. Start from there.

[momisery]

I am too... unless he cosigned again maybe? If she took out other liens maybe, but that is pretty hard on a car that is worth nothing... wouldn't you be responsible only to the first bank/credit union.. unless you signed something else?

[justbroke]

Once the debt is refinanced, you are no longer responsible unless you signed for the refinance as well. If the co-debtor used trickery and forged your signature and/or used your personal credit information to obtain credit and to refinance the vehicle... that's a whole different matter. That would have both civil and criminal issues and I'd try to sort through this immediately!

Even if the co-debtor refinanced through the same company, there is no way they can refinance debt and include someone who isn't a part to the refinancing agreement. Title issues aside, this would be cause for some serious anger to be directed in the co-debtor's direction.

[Dst1]

Even if the co-debtor refinanced through the same company, there is no way they can refinance debt and include someone who isn't a part to the refinancing agreement. Title issues aside, this would be cause for some serious anger to be directed in the co-debtor's direction.

Refinance is a loose term. It's possible if it was with the same lender that there was a change in the contract terms (lowering the interest rate, for example) that would not need the signatures of both parties. Without knowing the precise details, difficult to make a judgment.

[hardwayway]

Well, the balance of the loan is still high as she rolled some negative equity into it from a previous car she had. She/we never refinanced it, its on the original note.

Thanks again for the interest.