auto loan in Ch 13

[mb1966]

when i got divorced over a year ago, me and my ex parted with 2 vehicles and both cars were in both of our names. Now that im filing 13, i was pretty sure that co-signers were protected against any of the fallout from the BK of going on their (ex's) record. Now im wondering....the car im cramming down on my BK is in both of our names, but hers is listed first on the note. Is that going to matter?

[woeisme]

If you cram down, I imagine the lender could go after the ex for the deficiency. If you paid it in full then the CH 13 would in no way impact her, but if they change a portion of it to unsecured in the cram-down, then they can go after co-signers, sorry.

[mb1966]

i talked to my lawyers asst again this morning and she reassured me that this will in no way effect my ex wife. I hope not....im trying to fix my problem not make problems for her

[EricaCallaha]

Well you are a good man to keep this problem to yourself and try to be better for it.

A HUGE pat on the back....

[justbroke]

i talked to my lawyers asst again this morning and she reassured me that this will in no way effect my ex wife. I hope not....im trying to fix my problem not make problems for her

You should get that in writing with a money back guarantee. Seriuosly.

The lawyer can't control the creditor. Here's why.

Yes, there's a co-debtor stay which automatically protects any co-debtor, like your ex-wife, on debt you jointly created. The creditor can't go after the co-debtor... unless they get a relief from the automatic stay.

Generally, they won't go after the co-debtor if there is little or no deficiency to go after, because it costs money to actual pursue the money.

If the deficiency is significant, and you are in a less than 100% plan (I would say way way less than 100%), then the lender could go after the co-debtor for the deficiency.

Of course, the scenario I present, is the worst case scenario. There are many factors which could sway a lender not to pursue the co-debtor. However, it's a possibility and I'd be lying if I didn't tell you so.

[mb1966]

well, from what they are telling me on the car, i owe about 13k and it will cram down to 9500, which is what its actually worth

[mb1966]

and actually, if they tried to charge her with the difference i would pay it for her, i just dont want a BK to show up on her credit. Thats my goal

[justbroke]

and actually, if they tried to charge her with the difference i would pay it for her, i just dont want a BK to show up on her credit. Thats my goal

A BK will show up on her credit report.

[mb1966]

well thats just great. I should have traded it before i got this far. I think its too late to get rid of it

[IBroke]

You should get that in writing with a money back guarantee. Seriuosly.
The lawyer can't control the creditor. Here's why.
Yes, there's a co-debtor stay which automatically protects any co-debtor, like your ex-wife, on debt you jointly created. The creditor can't go after the co-debtor... unless they get a relief from the automatic stay.
Generally, they won't go after the co-debtor if there is little or no deficiency to go after, because it costs money to actual pursue the money.
If the deficiency is significant, and you are in a less than 100% plan (I would say way way less than 100%), then the lender could go after the co-debtor for the deficiency.

Of course, the scenario I present, is the worst case scenario. There are many factors which could sway a lender not to pursue the co-debtor. However, it's a possibility and I'd be lying if I didn't tell you so.

I couldn't have explained it any better, justbroke! Now I see why you filed per se...

A BK will show up on her credit report.

I'm not sure about that. As far as I know, a creditor is only allowed to report a BK if that person really filed BK. Prior to filing, the creditor is supposed to report identical information for both signers to the CRAs. That changes after a BK - and this might be one of the reasons. In a CH7, i.e., the creditor is supposed to stop reporting ANY information to the CRA on the report of the individual that filed. It has to show $0 balance and IIB (included in bankruptcy) after discharge. Now the non-filing co-signer is still responsible for the balance, so his/her reporting continues post BK. The balance/payments/lates are still reported on his/her report. And if you would also have a BK showing, how could there still be a balance and payments? That doesn't "fit" and that's what I found online:

http://www.brokencredit.com/?p=2233

[justbroke]

The balance/payments/lates are still reported on his/her report. And if you would also have a BK showing, how could there still be a balance and payments? That doesn't "fit" and that's what I found online:

I agree. However, I have seen issues. The co-debtor may need to have their report fixed, but I have seen everything from no changes, to an IIB, to Wage Earner, on the co-debtor account. Errors which should be able to be corrected.

[IBroke]

I agree. However, I have seen issues. The co-debtor may need to have their report fixed, but I have seen everything from no changes, to an IIB, to Wage Earner, on the co-debtor account. Errors which should be able to be corrected.

That's true - and considering how the majority of creditors are reporting these days, it's almost certain you have to clean up afterwards..

[mb1966]

well, im sure she will go ballistic if/when it shows up on her credit

[justbroke]

well, im sure she will go ballistic if/when it shows up on her credit

Even if it does show up, she can have it corrected.

That won't stop her from going ballistic first, as this tends to be the initial reaction in most situations like yours.

I would warn her that it may happen. I would then, after she stops screaming at you, inform her that she just needs to dispute and have the item corrected. I understand the potential emotional outburst and subsequent thrashing you may get.

Just want to be open about the likely chance that it will be reported (improperly). However, she can dispute it and have the information corrected.

I think you're ready to do what you feel is right, to correct the matter. However, this is the reality of shared debt... bankruptcy or not.

[mb1966]

talked to the attorneys asst again today and she said it is possible that my ex could be charged with the difference of the cram down amount vs the payoff amount....its unlikely but possible.
Would HSBC actually spend their time collecting $3500?