QUESTION
Owner of the auto loan files bankruptcy how does this affect the co-borrower?
Asked on Feb 11th, 2013 on Bankruptcy - Arizona
More details to this question:
If the borrower files bankruptcy and a car loan is included. Is the co-borrower responsible for the car loan? Should there be a balance on the loan if the borrower has the title?
14 ANSWERS
Bankruptcy Law Attorney serving Austin, TX
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Law Office of Susan G. Taylor
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If there's a balance on the note that is not paid, the co-signer is liable if the car is repossessed & sold for less than owed.
Answered on Feb 14th, 2013 at 6:27 PM
Based on the information the co-borrower will still be responsible for the car or remainder of the balance after the lender has sold the car, if the car is repossessed and sold.
Answered on Feb 13th, 2013 at 12:24 AM
The co-borrower, in that case, is now 100% obligated to pay back the loan.
Answered on Feb 12th, 2013 at 10:34 PM
Estate Planning Attorney serving Wilmington, DE
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Reger Rizzo & Darnall, LLP
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If borrower has title there probably is not a loan but if there is a loan the co-borrower that did not file bankrutpcy can be liable.
Answered on Feb 12th, 2013 at 8:54 PM
Bankruptcy Attorney serving Alpena, MI
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Carl C. Silver Attorney at Law
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The co-borrower will be 100% liable for the auto loan.
Answered on Feb 11th, 2013 at 8:03 PM
Any balance due on the car loan would remain after the bankruptcy. The borrower would have to reaffirm the debt to keep the car. If he does not reaffirm the debt, the the co-signer would be liable for the remaining balance.
Answered on Feb 11th, 2013 at 8:02 PM
Co-Debtor is liable for the car note debt, unless the original Debtor reaffirms the debt and does not default on the payments.
Answered on Feb 11th, 2013 at 8:02 PM
That depends a great deal on how the vehicle is treated in the bankruptcy. If the debtor surrenders the vehicle, it will be sold, he will be discharged and the co-signer will be left owing the difference. If he keeps the vehicle and continues to make payments, it should not affect the co-signer at all.
Answered on Feb 11th, 2013 at 8:01 PM
Chapter 13 Bankruptcy Attorney serving Winston-Salem, NC
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Love and Dillenbeck Law
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It depends on what chapter he/she filed and if he.she intends to pay for the vehicle.
Answered on Feb 11th, 2013 at 7:58 PM
Richard hirsh
The co-borrower remains liable on the on contract.
Answered on Feb 11th, 2013 at 7:56 PM
Let?s take the last question first. Generally, if the borrower is in possession of the actual car title the loan has been paid off. You should check with the lender, and they must talk to you since you are a co-borrower. If the debt is not paid off, the co-borrower remains liable on the debt if the other borrower files bankruptcy.
Answered on Feb 11th, 2013 at 7:56 PM
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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The co-borrower is liable to the bank just as if the bankruptcy never took place.
Answered on Feb 11th, 2013 at 7:55 PM
A piece of the puzzle is missing. The fact that the co-borrower has filed bankruptcy doesn't not indicate whether or not this person is willing to continue paying for the vehicle or not. When a vehicle is financed, the lender typically has possession of the title. If the bankrupt co-borrower doesn't pay for the vehicle, the other co-borrower is responsible for paying for the vehicle, or if the vehicle is repoed, the deficiency.
Answered on Feb 11th, 2013 at 7:55 PM
Bankruptcy Attorney serving Phoenix, AZ
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Law Office of D. L. Drain, P.A.
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The borrower is responsible until either the debt is paid or a bankruptcy is filed. You are still responsible for the debt if you are a co-borrower and did not file for bankruptcy.
Answered on Feb 11th, 2013 at 7:55 PM