What happens if there are 2 people on an auto loan and 1 of the co-signers files for bankruptcy?

Do they lose the vehicle?

Asked on November 21, 2013 under Bankruptcy Law, Illinois


Terence Fenelon / Law Offices of Terence Fenelon

Answered 7 years ago | Contributor

Your question depends upon the status of the payments at the time of filing as well as the type of bankruptcy which was filed.

If the payments are current and a reaffirmation agreement is entered, there should be no ramifications.  If the payments were deliquent, the creditor can seek to remove the Stay and take back the vehicle.

If a chapter 13 was filed, the debtor may be able to retain the car and pay the arrearage over time.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.