What to do if I co-signed on a loanbut the other party filed bankruptcy and now I’m being sued for the debt?

UPDATED: Jul 26, 2011

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

UPDATED: Jul 26, 2011Fact Checked

Get Legal Help Today

Compare Quotes From Top Companies and Save

secured lock Secured with SHA-256 Encryption

What to do if I co-signed on a loanbut the other party filed bankruptcy and now I’m being sued for the debt?

My ex-girlfriend filed bankruptcy on the car and it was repossessed. Now the loan company is suiing me. The car was resold and they are coming after me for the negative balance of close to $7,000. I never had a notice that she was filling bankruptcy or her delinquency on the car note. They never told me they were selling the car. Now they want me to pay for the rest and have nothing to show for it. I have a checking account with the loan company and I have been to the bank several times cashing checks paying a different loan and not once did I ever know of anything going on.

Asked on July 26, 2011 Tennessee


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

If you were the co-signer for a loan on your ex-girlfriend's car, you are on the hook for any deficiency of the car's sale after a repossession and subsequent sale most likley. By signing on the loan, you agreed to be bound by the loan's payment terms amongst other things.

However, you may have certain defenses. First, read the loan agreement carefully as to notice provisions for any repossession and subsequent sale where a deficiency on the loan could result. If required notice did not happen and if state law on the auction sale was not complied with, you might not be liable for the deficiency of $7,000.00.

Also, if your ex-girlfriend did not list you as a possible creditor on her bankruptcy filing, you potentially could bring a lawsuit against her for payment on the deficiency regardless of her bankruptcy discharge.

You should consult with a bankruptcy attorney and an attorney versed in automobile auction notice requirements about your situation.

Good luck.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption