QUESTION
Would I be safe to think that it will no longer harm her credit if loan responsibility shows terminated?
Asked on Aug 06th, 2017 on Bankruptcy - Wisconsin
More details to this question:
My mom was my co-signer for a car loan. Since then, I have filed and discharged for bankruptcy. I am thinking of calling to surrender the auto but I am wondering how it will affect her credit. I checked my credit report and hers and there is something that got me off guard. On my account, it states that the loan responsibility individual and on hers it shows terminated.
3 ANSWERS
Commercial & Bankruptcy Law Attorney serving Powell, OH
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Ronald K. Nims
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Credit reports show what the lender tells the agency. It appears the lender made an error but it benefits both of you.
Answered on Oct 20th, 2017 at 6:57 PM
1 Award
If it is really a cosigned loan, then they have simply reported incorrectly to the credit reporting agencies. If they repo the car, they will show it in default on her credit and sue her for any deficiency. This will also be a trigger in their system and they will start reporting correctly. If you want to protect the cosigner, you must get current and stay current on the payments.
Answered on Oct 18th, 2017 at 5:38 PM
Bankruptcy Attorney serving Madison, WI
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Richard B. Jacobson & Associates, LLC
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he fact that her credit report shows her obligation is terminated is very odd. Your bankruptcy releases you from personal liability on the obligation; it does not release co-debtors or guarantors (at least if you filed under Chapter 7). If someone evaluating her credit looked only to the credit report you saw, then probably your discharging the debt will not harm her credit. But be sure to check all three of the major credit reporting companies.
Answered on Oct 18th, 2017 at 10:14 AM