Filing Bankruptcy As a Cosigner

My question involves bankruptcy in the state of: OHIO

Hello,
First of all, thanks for any and all help. Here is my situation:

I bought a vehicle a few years back. I had poor credit so i had to have a cosigner on my loan.
Unfortunately i still could not get approved, so they switched us around. The person who was supposed to cosign for me became the primary loan holder, and i became the cosigner. the vehicle is mine. i make the payments, drive the car and pay the insurance / maintenance.

I am not sure if my name appears on the title or not. All of the billing statements come in their name. no sign of mine at all.

I am filing chapter 13 bankruptcy to reorganize my debts.

i guess i just need to know what are the ramifications of this. will this affect them since i am just the cosigner and not the primary loan holder?
if i am not on the title at all, will it affect them at all

sorry if thats not clear, i'm new to all of this.

thanks again,
Kevin

Are you on the title or not?

If not, expect them to come and collect the car as soon as they find out about the bankruptcy.

If I'm not on the title, and nothing is in my name, would it have to be included in the bankruptcy?
If the payments continue to be made, why would they come and get it? I guess that's what I'm confused about.

Because in all honesty, it doesn't benefit them one bit. If it were me, I'd want to protect my property and I'd be on your doorstep very quickly.

You can read here though: http://www.alllaw.com/articles/nolo/...hapter-13.html

Does it change if I am on the title?

Did you read what I gave you?

If you are on the loan (and it does not matter who is primary or who is secondary since both are EQUALLY responsible for payment) the creditor MUST be listed in your bk.

Chances are you are also on the title but, even if you are not, you have an “equitable interest” in the vehicle since you have been making the payments. Therefore the vehicle IS an asset that is listed on Schedule B. See 11 USC 541(a)(1)

Since the debt will be listed and the vehicle is an asset of the bk estate the lender, once notified of the bk, WILL NOT repo the vehicle unless it is given the ok by the bk court. If your Plan properly provides for the debt and the vehicle is insured the court is unlikely to give the ok.

Your Chapter 13 Plan can provide for FULL payment of the co-signed obligation pursuant to 11 USC 1301 and will thus protect the co-signer.

Go see an attny to discuss further.

Des.

I am actually quite familiar with this particular issue. The answer is, that the loan company will not attempt to repossess the car, even if the car is included in a bankruptcy, as long as the payments continue to be made on time. You can also reaffirm the car in a bankruptcy as well.

The far bigger problem is that it can cause a ding on the credit report of the person who signed for the loan, who is not filing bankruptcy.

Whether or not the lender will regard a cosigner's bankruptcy as a basis to accelerate the loan or repossess will depend principally upon the terms of the loan contract (which you can expect will favor the creditor), the borrower's credit, and the amount still owed on the loan. In many cases it will not make sense for the lender to repossess, but it is very much an overstatement to suggest that it never happens. This is not a classic cosigner situation, as the "cosigner" is actually the purchaser of the vehicle and should be declaring the car on her Schedule B, triggering the automatic stay and potential to restructure the debt. It would be helpful to know if this information was accurately reported to the lender, or if they were deceived into believing that the buyer and cosigner were who they claimed to be on the loan application.

Quote:

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Quoting Mr. Knowitall

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Whether or not the lender will regard a cosigner's bankruptcy as a basis to accelerate the loan or repossess will depend principally upon the terms of the loan contract (which you can expect will favor the creditor), the borrower's credit, and the amount still owed on the loan. In many cases it will not make sense for the lender to repossess, but it is very much an overstatement to suggest that it never happens. This is not a classic cosigner situation, as the "cosigner" is actually the purchaser of the vehicle and should be declaring the car on her Schedule B, triggering the automatic stay and potential to restructure the debt. It would be helpful to know if this information was accurately reported to the lender, or if they were deceived into believing that the buyer and cosigner were who they claimed to be on the loan application.

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I am not sure that is as big of an issue as you might think. They both own the car and are both responsible for the loan, no matter whose name appears first on the loan. The creditor would much rather have the payments made on the loan, than to repossess it. Again though, the key is that the payments must never stop being made, not even while the bankruptcy is pending.