car cosigner and bk

[rjl0206]

just wanna ask if a cosigner can be affected in a car loan if the primary were to go into bk13? car is current in payments and will be kept. thanks all.

Ray

[AngelinaCat]

I am not sure of the ramifications of a co-signer in a Ch13, but in a Ch7, if you discharge the debt, the co-signer is stuck with it.

[justbroke]

As Mrs. Cat wrote, a Chapter 7 will cause the co-signer to be responsible and the creditor more than likely will pursue them.

Flip to the Chapter 13 side. The co-debtor is actually protected by something known as the Co-Debtor Stay, which is not too dissimilar to the Automatic Stay imposed by 11 USC 362 (the section of the Bankruptcy code which protects the debtor).

Unfortunately, the co-debtor stay can be waived by motion. Generally a creditor will see what the debtor will pay in the Chapter 13 towards the debt. Then, the creditor will look at the difference between what the debtor will pay and what the actual loan balance is.

If there's a difference, the creditor may seek relief from the co-debtor stay to pursue that difference, from the co-debtor. These are granted purely based on whether there is an amount left which is not covered by the Chapter 13 debtor's plan.

If you're not cramming down your car (by bifurcating or splitting the claim into a secured amount and unsecured amount), your co-debtor need not worry unless you're surrendering the vehicle.

If you are cramming down the car, the lender could pursue the difference between the unsecured portion of their claim and what you pay in your Chapter 13.

Let me add that if you keep the loan as is, and stay current, the lender would not pursue the relief from co-debtor stay. It's all about the money!

[AngelinaCat]

Thank you Justbroke for that information.

[rjl0206]

now with respect to BK13,

will it matter if I am the cosigner and my father is the primary signer of the vehicle? I mean, I make the payments and all, keep the car through BK13. will his credit be affected in any way since he is the primary signer of the vehicle? thanks

Ray

[chloe0724]

I filed BK 13 and my husband did not. Our joint debts (home & car) are only showing BK for my credit report. As long as the payments are kept current, the non-filing co-signer is not affected.

[justbroke]

now with respect to BK13,

will it matter if I am the cosigner and my father is the primary signer of the vehicle? I mean, I make the payments and all, keep the car through BK13. will his credit be affected in any way since he is the primary signer of the vehicle? thanks

Ray

It may affect him as he is responsible. Even if it did affect his credit report, you should be able to have that corrected... IF... you were paying on time to start with (prior to filing Bankruptcy).

[BrokeinGa]

Co-signer

I will give you my experience. I had co-signed on a bike loan for my son. Payments were kept current, but once I filed, it has affected him. He was unable to pay his payments online, unable to obtain monthly statements, the loan company jacked his interest rate way up. I talked to the loan company and they said his credit report will reflect a "charge off". I found this dumbfounding, as payments were and are being made. There were actually two seperate loans, and one of them they said is due and payable immedietely. I have submitted this to my attorney and he is working on it. I had no idea that my filing would affect him this much, and in hindsight, I may not have filed if I had known this.