Q: Can I cancel a reaffirmation for a car that has a co-signer on it, without the cosigner being affected?
My re-affirmation for my vehicle was approved in my chapter 7 bankruptcy. When I purchased the car, my dad co-signed for me. My car now needs repairs that are too expensive given the value of the car. I want to cancel the reaffirmation and turn over the car and purchase a new car. What happens to my-cosigner that was on the vehicle when I purchased it?
A: No. The co-signer will still be held to answer for the deficiency if you cancel the traffic.
David Luther Woodward agrees with this answer
A:
Unlike a Ch. 13 bankruptcy, the filing of your Ch. 7 bankruptcy did not stay the vehicle lender's rights against any non-bankrupt co-signer on your loan.
Your father remains liable to the lender on the obligation. If the creditor accepts surrender of your vehicle, and then sells the car, he will remain liable for any deficiency, i.e., any shortfall between the sales price and the current balance of the loan.
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