Q: If filing chapter 7 and I am a co-signer on an auto loan, the primary person should be able to continue paying the loan?
A: Yes, your statement is correct. The primary person would still be eligible to make and obligated to make the payments
A: The other borrower should continue to make the payments and not be late and the financier should be okay with that. You might give them a heads up what your plan is to make sure they will be okay with it.
A:
No, not necessarily. The lender is entitled to insist on having you reaffirm the loan. That is because the practical effect of your bankruptcy is eliminate the benefit the lender currently has of having you as a cosigner. Remember, they would not trust loaning money to the other person without a cosigner, and they probably still feel that way.
You should discuss the benefits and detriments of reaffirmation with your own BK lawyer.
It is time for you to get a lawyer. A forum like this is good for general guidance, but not appropriate for specific advice like "you don't have to worry about this or you should be worried about that." The reason being that we don't have the entire file and we don't know all the details about the situation that are necessary to know to advise you correctly.
Most BK lawyers will give you a free consultation so you can find out if it's going to be good for you. I suggest that you not hesitate to consult several or more lawyers. You will find there are big differences between lawyers in what they know, what they charge, and their level of friendliness.
A: I agree with some of Mr. Bayer's comments. And also agree that the co-signer or you should continue making payments on the car. That may not be enough however since the Bankruptcy Code requires a reaffirmation agreement on a car loan - a new agreement that must be signed after the bankruptcy is filed. Seek advice from a qualified, experienced bankruptcy attorney about this. You should also advise the co-signer about your plans to file bankruptcy. Since that person is on the loan, and you must list the creditor in your bankruptcy case, the fact that the account is "in bankruptcy" may be reported on his credit (not that he filed bankruptcy) - but may have a negative impact on the co-signer in this regard. May be other options - get advice before filing.
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