How will non-payment of a car loan affect my credit?
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How will non-payment of a car loan affect my credit?
My ex-wife drives a car in my name. When I filed Ch 11 she continued making the payments. Now she wants to walk away. Is that going to effect my credit?
Asked on April 4, 2011 under Bankruptcy Law, Arizona
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
Any default on a loan will negatively affect a person's credit rating. The "good" news it that if you've already filed Ch. 11, it may not have much more impact--not only does filing bankruptcy generally knock your credit score down by around 200 - 300 points (roughly; the credit rating companies play their formulas very close to the vest), and you may have had other defaults prior to declaring, pushing it down more. The way the formulas *seem* to work, the higher your score, the more negative information impacts it; so if you credit score has already been lowered and you will be showing bankrupcy on credit reports for many years, while you don't want another default, it may not hurt your credit all the much more.
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