Considering chp 13 - co-signed for my son's car 18 months ago ...

[jb4lcm]

Considering chp 13 - I co-signed for my son's car - he's in the military and auto paying directly since day 1 and he's now deployed. Is this loan going to be excused from my stuff if I go chp 13, or is this co-sign going to be considered MY vehicle no matter what and will use up some of the exemptions as there's about 4,000 in equity.

[justbroke]

If you are just a co-signer and not the primary applicant, then the only thing that should happen is that you are not responsible for the payment and the lender will continue to collect the payment from the primary applicant.

[jb4lcm]

Co-signing makes you the primary because the other person's credit isn't strong enough to get the loan. It helps them get credit established.
back to the original question regarding bankruptcy - if you file for chp 7 or 13 and have co-signed on a car for a family member that has 4K of equity - does this loan go against YOUR exemptions?
i.e. the $6,000 car exemption (equity) you are allowed in BK - will this 4K of equity in the co-signed loan be used against the 6K allowed?

[LadyInTheRed]

Is title to the car to in your name? If not, you.won't need to use your exemptions to protect it. If so, the answer isn't as clear and you need to discuss the question with your attorney.

[despritfreya]

What State are you in?

And. . .

A few comments. . .

1. You have a ½ “legal” interest with your son as you are on title with him.
2. You have no “equitable” interest in the vehicle because not one penny of your money went into paying for and/or maintaining the vehicle.
3. You are on the loan with your son.
4. Your son makes all the payments.
5. Your son is currently in the military and is deployed (Thank you for his service to this Country).

You list the vehicle on Schedule B with a value of $0.00. In the description of the vehicle you state that you have ½ bare legal title with no equitable interest as this is your son’s vehicle. You do not utilize an exemption because the vehicle does not really belong to you.

You list the lender on Schedule D.

You list in your Plan that the vehicle WILL NOT be provided for through the Plan as it is being paid by the other ½ titled owner who holds 100% equitable interest and is the co-signer on the loan (or some similar language).

You discuss all of the above with your attny to make sure the above is the way he/she handles such matters. The above is the way I handle them.

Once the lender is notified of the bk it may stop the direct payments from your son. Someone needs to watch this to make sure payments remain current. As it relates to collections in general, because your son is deployed, the Service Members Civil Relief Act applies to him. I do not know how the Act works but here is a link to some information. . .

http://www.military.com/benefits/military-legal-matters/scra/servicemembers-civil-relief-act-overview.html

Des.

[jb4lcm]

Thank you for this info. I will discuss it with the atty.