QUESTION
Can the judge allow me to hand the vehicles over and not have to pay the difference, as if a co-signer did not exist?
Asked on Jun 12th, 2013 on Bankruptcy - Delaware
More details to this question:
I have recently filed Chapter 7 Bankruptcy. My hearing was held, where my attorney also had me sign Reaffirmation Agreements on 2 vehicles. Both vehicles are in my name and co-signed by my father. I have substantial negative equity on both vehicles and cannot afford to turn the vehicles over as neither myself or my father can afford to pay the difference to the lender. Now a judge has ordered me to a Reaffirmation hearing, which my attorney did not expect to happen. I would not keep either vehicle under normal circumstances but I am forced to do to protect the co-signer. What are my rights going forward? Can the reaffirmation hearing judge absolve my father and have him removed as a co-signer?
6 ANSWERS
Richard hirsh
Your bankruptcy cannot "absolve" your father of the liability. The judge is holding a hearing because he apparently does not believe you should reaffirm those 2 vehicles. If you reaffirm and then default on the cars and they are repossessed, then you will owe the deficiency. If you withdraw or rescind the reaffirmations or the judge disapproves them, you will not owe any money if the cars are repossessed or your surrender them. I think that is the best you can do and if the banks come after your father it would only be for the deficiency if you surrender the vehicles.
Answered on Jun 12th, 2013 at 10:30 PM
Bankruptcy Attorney serving Florissant, MO
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Law Offices of Thomas Corcoran Phipps
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A reaffirmation agreement has to be approved by a judge, so you are stuck with his or her decision. Either way, if you keep paying on the vehicles, the creditors should not come after your father.
Answered on Jun 12th, 2013 at 10:30 PM
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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You have a bankruptcy attorney, follow his advice.
Answered on Jun 12th, 2013 at 10:29 PM
Estate Planning Attorney serving Wilmington, DE
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Reger Rizzo & Darnall, LLP
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It will not remove your father as co-signor.
Answered on Jun 12th, 2013 at 10:28 PM
The bankruptcy judge cannot resolve issues of someone who has not filed a bankruptcy case that is in front of him. The judge can only determine whether or not it is in your best interest to reaffirm this debt & from your description, it is clear that reaffirmation is not in your best interests. You being willing to pay the debt to protect your father from liability isn't a good reason to approve a reaffirmation.
Answered on Jun 12th, 2013 at 10:28 PM
Bankruptcy Attorney serving Walnut Creek, CA
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Alan E. Ramos Law Offices
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I don't believe that the court has the authority to remove a co-signor's liability for a debt. It sounds like the court recognizes that you do not have the ability to make the loan payments. It is possible that the judge will deny the reaffirmation.
Answered on Jun 12th, 2013 at 10:28 PM