If my friend files Chapter 7 and she co-signed a car for me, what will happen to my car?
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If my friend files Chapter 7 and she co-signed a car for me, what will happen to my car?
I have owned my car for 3 years now. I only have 1 year left to pay and I just got a letter that said my friend (ex-friend) filed Chapter 7 bankruptcy. I tried calling the bank and they said to keep making my payments on time and they will notify me within a couple of months on whether they will have to repo the car. Is there anything I can do?
Asked on April 24, 2012 under Bankruptcy Law, Missouri
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
So long as you who is the person who is primarily obligated on the loan for the vehicle that you have continues to make timely payments on it, you have nothing to worry about it with respect to the Chapter 7 bankruptcy filing of the person who co-signed the loan for this car for you.
The co-signer most likely will be discharged of any obligation under the loan, but you will remain obligated under it. If you continue to make your payments under it, you cannot have your car repossessed since you are not in breach of the loan agreement for it.
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