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Financed Vehicle With Cosigner and Chapter 7 Bankruptcy

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Firegurl18

New member
What is the name of your state? NJ

I'm filing for bankruptcy. Chapter 7. I am financing a 2015 Chrysler 200. I have 2 1/2 more years to pay on it at 30% interest rate. About $700 a month. My step dad cosigned for me. I contacted the lien holder, Cheysler Capital. They said if the car is repossessed, it will be removed from my credit and the co-signers credit. We won't owe anything on the vehicle. The car is only worth about 10,000. I still owe about $17,000 on it. The vehicle also has front end accident damage to it. I didn't mention it has damage. So I'm not sure if the lien holder will go after ny dad for the cost of damages. Should I include it in the bankruptcy or apply for an affirmation for it?
 


justalayman

Senior Member
there Is no reason the debt wouldn’t be reported on your step fathers credit, at least once the creditor goes after your step father for what he promised to pay. Bankruptcy absolves you of the debt but not your step father. Why the creditor would make the statement they have about the co-signer owing nothing is beyond me.

I suggest you speak with the attorney you’ve engaged for the bankruptcy. While you would normally want to dump the debt and the upside down financing, you can’t also save the co-signer at the same time. There is a Bk attorney that posts here (although with varying frequency). Hopefully she will catch this and have some suggestions.
 

adjusterjack

Senior Member
30% interest
Yikes. How does anybody let that happen?

They said if the car is repossessed, it will be removed from my credit and the co-signers credit.
That doesn't sound right. More likely the debt will be shown as discharged in bankruptcy.

We won't owe anything on the vehicle
You won't. Your co-signer will owe and if he doesn't pay his credit will be trashed, might even get sued.

The vehicle also has front end accident damage to it.
You didn't get it fixed with the insurance money?

Should I include it in the bankruptcy or apply for an affirmation for it?
Entirely up to you to decide after talking to a bankruptcy attorney.
 

FlyingRon

Senior Member
That doesn't sound right. More likely the debt will be shown as discharged in bankruptcy.
For the poster. For the cosigner, it likely will show up as a repossession.

You didn't get it fixed with the insurance money?
In fact, that works against the poster and his cosigner. You don't get any adjustment for not maintaining the vehicle as agreed to in the loan.
 

Firegurl18

New member
I want to call my lein company back and record the conversation of the customer service rep telling me what was said before and then play it back for my lawyer if I am told the same thing. It will be completely removed from both mine and my cosigner's credit report and he won't be responsible for the balance. If I am told the same thing, I will repeat and make sure it is clearly stated in the recording. This way, if I do decide to not follow through with the affirmation, I'll have 100% evidence. But of course I will discuss this further with my attorney. I am also the cosigner on another vehicle. I know I have to inform that company I am filing bankruptcy and include it in the bankruptcy. My lawyer did say that vehicle should be fine to not worry about that one. I do also need to ask him that once the bankruptcy is over, if both vehicles will show on my credit report as positive payment history as long as we keep it up with the payments. Depending on what the other company says...but if they say I can remain a co signer, if...I need to find out what happens to my credit with that and same if I do the affirmation on my car.

Thanks for the responses and future responses. :)
 

justalayman

Senior Member
I want to call my lein company back and record the conversation of the customer service rep telling me what was said before and then play it back for my lawyer if I am told the same thing. It will be completely removed from both mine and my cosigner's credit report and he won't be responsible for the balance. If I am told the same thing, I will repeat and make sure it is clearly stated in the recording. This way, if I do decide to not follow through with the affirmation, I'll have 100% evidence. But of course I will discuss this further with my attorney. I am also the cosigner on another vehicle. I know I have to inform that company I am filing bankruptcy and include it in the bankruptcy. My lawyer did say that vehicle should be fine to not worry about that one. I do also need to ask him that once the bankruptcy is over, if both vehicles will show on my credit report as positive payment history as long as we keep it up with the payments. Depending on what the other company says...but if they say I can remain a co signer, if...I need to find out what happens to my credit with that and same if I do the affirmation on my car.

Thanks for the responses and future responses. :)
That’s not how this works. That’s not how any of this works.


You can record whatever you want. The lender has a legal right to seek payment from the co-signer if you don’t pay the loan. It really is that simple and even if they tell you they won’t go after him, they still can.

Whether the payments show up at all, post bankruptcy, is up to the lender. They don’t have to report the payments. In fact, as another poster here discovered, the lender intentionally refused to report post Bk payments due to some legal issues involving the bankruptcy and liability for the appearance of making collection attempts which they were barred from doing.


Regarding the car you have co-signed on: let your liability be discharged in the Bk. The intent of Bk is to remove your debt load. Trying to hang onto a debt, especially when it doesn’t benefit you, is not the thing to do.

The bankruptcy will be a black mark on your credit history. Once you come out of bankruptcy, you start rebuilding your credit. Being a co-signer isn’t going to do that for you.
 
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