My credit isn't good enough to get an auto loan, so I had a family member co-sign for me and got the loan. Now, that family member is in a really bad spot and might have to file bankruptcy. I have made all my payments on time and can continue to do so, but I still can't get a loan in my name. What happens to my car?
2007-10-21 12:39:27 · 4 answers · asked by . 2 in Business & Finance ➔ Personal Finance
Also, is it better for my co-signer if I can refinance and get him off the loan before he files?
2007-10-21 12:44:00 · update #1
As long as you keep up the payments on that loan ,
You should be OK . . .
But talk to their bankruptcy attorney to keep your vehicle out of the process .
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2007-10-21 12:43:34 · answer #1 · answered by kate 7 · 0⤊ 1⤋
As long as you are current on your car, your co-signor's bankruptcy will have no impact on you. All it means is you will be the only person that the lender can go after if you default on the loan (fyi it is not very common for the co-signor to be the one that files bankruptcy, it is usually the other way around).
As for refinancing. There is no need to refinance, your family member will no longer be liable for the loan, the terms will stay the same, just let sleeping dogs lie.
Also, typically co-signers are jointly on the title of the car, so they will have to list the car on Schedule B, but most states have a reasonable exemption, and you have a share in 50% of the equity so you shouldn't have to worry about losing the car unless it's a luxury vehicle with like at least $7,000 in equity. And I am sure your family member's bankruptcy attorney is aware of this and making sure the car isn't lost trough the bankruptcy, but if not, you might want to call his/her bankruptcy attorney and ask about it. I have yet to have a client lose their car in a bankruptcy due to value as cars with loans rarely are worth more then the debt amount.
2007-10-22 16:46:01 · answer #2 · answered by Lesley 5 · 0⤊ 0⤋
Who is the primary on the loan? If its your family member than the vehicle is considered a assest to them...and filing bankruptcy now adays they take it all including cars, i think your allowed a car worth 2000 anything over that you have to buy back if you want to keep it. I would try and keep it solely in your name to avoid any action. Speak to the attorney and the finance company maybe if you explain to them they will work with you. As for your credit i know car credit is different then credit cards or for mortgage etc.. Keep trying good luck.
2007-10-21 20:05:45 · answer #3 · answered by Rachel S 1 · 0⤊ 1⤋
Nothing will happen to your car as long as you continue to make the payments. If the loan is in good standing, nothing will happen. However, it's a good idea to keep the loan in good standing. If you do nothing else to your credit, hopefully your good car loan will help you in the future.
2007-10-21 19:44:17 · answer #4 · answered by P&Rsmommy 4 · 1⤊ 0⤋