If my mom co-signed for my car and now she’s filing for bankruptcy, how does that affect things?

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If my mom co-signed for my car and now she’s filing for bankruptcy, how does that affect things?

Asked on November 21, 2012 under Bankruptcy Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

1) The bankruptcy does not affect your obligations at all: as the primary signer and the car's owner, you are still obligated for any remaining payments.

2) It may not affect your mother's potential liabilty either, if you have not defaulted on the car up to this point. A bankruptcy affects *existing* claims against a person; but if there's been no default, there has been no claim against your mother as co-signor. If you default in the future, after the bankruptcy filing, it is therefore possible that the lender (or dealer--i.e. whomever you are making payments to) can seek to recover the money from your mother.


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