Bankruptcy question, confused!

Question

I am the main owner of my daughters car she is the co-owner. She has always paid for the car but just didnt have enough credit to have it soley in her name. I am going to be filing bankruptcy and am wondering if I can keep her car out of it as I will be trying to do with mine. Also will me going into bankruptcy affect her credit with the car?

Answer 1

As long as you have proof that she pays it and you yourself do not pay for it then most courts will let you keep it.

Answer 2

You may have a chance to avoid bankruptcy.  Check out my source.

Answer 3

No you can't the only way is for her to buy the car in her own name or sell the car or let the car go back in.

You need to discuss it with her bank, yes it can effect her credit.

You should discuss it with your attorney as well.

Generally, if one co signer defaults they go after the other.

You can do a  reaffirmation of the loan, and continue to pay as always but you will both continue to be responsible for loan, unless she takes you off the title and assumes the loan without you.

There are many legal implications so it is best to follow the advice of your attorney.

Answer 4

You should consult your attorney on this, but in my state, if you don't reaffirm and she continues to make payments and they accept them, everything will just continue, and then later if she decides to NOT pay the note anymore you would not be held responsible for the debt, since you did include it in your BK.  They could repo the car but no harm can be done to you. You severed you responsibility to the vehicle with the BK.  However if she pays it off then she will receive the title and everything will go as it should.  You should ask you attorney how this works and if this is an option for you.

If you re affirm you accept responsibility again.

Answer 5

All debts must be included in a chapter 7 bankruptcy, but what you can do is sign a reaffirmation agreement on both cars and keep making the payments just like you have been doing.

Make sure and call both lenders and ask that they continue to report your payment history to the credit bureaus, this will help you to re-establish your credit after your BK discharges.

Answer 6

You decide who you want to include in your bankruptcy and who you don't. If you daughter pays on time and you don't want to ruin her credit, leave that car out when you file. You can't just file your half on the bankruptcy for that car.

Answer 7

If you file bankruptcy, the Courts (rather than you) will decide what to do with ALL your possessions (including both cars), and may well decide to sell them both.  The only thing the Court cannot take away from you is your home.  

You cannot just "abandon" your debts and have them magically vanish by filing for bankruptcy, I'm not quite sure where folks get that notion!

Sell everything you have of any value, and use the money to settle with your creditors....

Here's a good place to start:

http://www.daveramsey.com

Answer 8

The key here is who's name is on the title to the vehicle?  Are you the main loan holder or just the co-signer?  If you are the co-signer there shouldn't be any problem.

If title is in your name it must be included in the bankruptcy.  But I don't see much of a problem as long as the daughter is willing to continue to pay on the car.  The bank has little choice.  I'm sure they don't want to take it back and try to re-sell it.  

This is one of those issues you need to run by an attorney.  I've seen this exact think happen here in Michigan and it never posed a problem....but each state's BK court works different.