If someone has an auto loan with another person and they file bankruptcy does it affect the other person too?

I have a car and my mom is the co-applicant and she filed for bankruptcy. I no longer receive statements on my account but i do pay every month on time for the car.

If someone has an auto loan with another person and they file bankruptcy does it affect the other person too?
Call the loan company that holds the note on the car and ask them to transfer the responsibility of the loan completely into your name.





Chances are... they will love to do that because your Mom is filing bankruptcy and they can't get anything out of her.





It is better to be pro-active in this scenario... before they think it necessary to repossess the car since she is going into bankruptcy.
Reply:First of all, let's deal with your mom's case, since it will affect you as the co-signer.





Did your mom file for Chapter 13 or Chapter 7 bankruptcy? If Chapter 7, was it a no-asset case? If it was a no-asset Chapter 7, your mom will probably have the debt for the car discharged, unless she chooses to re-affirm the debt. (She shouldn't re-affirm the debt. Re-affirming means she wants to continue to be responsible for the debt. There are usually few reasons why someone should do that when filing BK.) If she had assets in a Chapter 7, it is possible that the BK Court will take part of her assets and apply toward the car loan. If she filed Chapter 13, she will be making payments for the next 60 months, and part of each of those payments will go toward the car. (If she filed Chapter 13, her attorney might be able to file a motion to strip the lien so that she doesn't have to . She needs to speak to her attorney about that.





Now, as to you. Your responsibility for the debt continues since you did not file for bankruptcy. As long as your mom's BK case is open, they probably won't send you monthly statements. If you continue to make the monthly payments, however, the loan company will accept them and allow you to keep the car. If you fail to make the payments, they will repossess the car, and sue you for the balance owed. So, if you want to keep the car, keep making the payments. Once you pay the car off, you'll get the title just like you would if mom hadn't filed BK.





It's possible the lender might report the loan to your credit report as "Included in Bankruptcy" or IIB status. If they do, dispute it, saying that you did not file BK. They might not remove the notation, but you have the right to put a short statement on your report saying that your co-applicant filed BK, not you.





I recommend you go to http://www.creditboards.com to read about how her filing will affect you as a co-signer. The forum there is extremely good at helping people with financial advice.
Reply:Sadie A, Try getting a free online auto loan quote. http://www.goodinternetdeals.com/Auto-Lo... The questionairre will let you know if you can be approved. It's free and you can get an answer in minutes.

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