We cosigned for daughter's car - have questions

[pandacb]

Chapter 7, soon. Attorney says first step would be to get the car in daughter's name only but the credit union won't do that because she is a full time student, living on student loans.

Second step would be to "surrender" the car to the credit union and they will look to daughter for payment and it won't affect her credit because she is not filing.

Sounds like a good plan BUT the credit union told our daughter "be sure your parents re-affirm or we'll come get the car." It is current, never late, more than 1/2 way through the payment term. Oh, and yes she is on the loan and title.

Could you please weigh in with your opinions on what will happen to her car?

[NoMoreCards]

I was a co-signer on a lease for my daughters car. She has made all the payments and wanted to keep her car. So I did reaffirm her car and she continues to make the payments. It wasn't a big deal here, although I did have to get court permission for the reaffirmation.

So I think the question is, who makes the car payments? And can she (or you) afford to continue to make the car payments, and what is the value to loan ratio? These answers will tell you what is best in your situation.

[AngelinaCatHub]

I doubt the Credit Union wants another used car in lieu of payment. If daughter is paying the note, let her continue. As far as the car, your part of the cosign will be discharged but your daughter then is 100% responsible and the car probably would not be repoed if she keeps current. I would NOT reaffirm. Also, they would not repo while you are in your bk procedure as per the automatic stay. 'Hub

[AngelinaCat]

To add to 'Hub's post, the CU would have to file a motion with the court to lift the Automatic Stay, should they wish to initiate repo proceedings. But if she is making the payments and is current, this should not be a problem. She HAS to stay current, though.

As to reaffirming the loan, many here recommend against reaffirming a car loan, but this MAY be required by your particular CU. We only had about 8-9 payments left on our car, and our CU required reaffirmation. This situation is something that you, your attorney, and your CU's bk department need to discuss in earnest.