How to remove a co-signer, soI can file bankruptcy?

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How to remove a co-signer, soI can file bankruptcy?

My grandfather is a co-signer on a vehicle loan that Ivoluntarily had repossessed due to a few situations that caused me to fall behind on the payments. in order to avoid check garnisments I made arrangements with the banks lawyers to pay $150 a month, which Ireally can’t afford right now with rent bills and putting myself through school. I was told if I file now with him as a co-signer, it would leave him responsible to pay for “my debt”. If this is true how can i get my grandfather off the loan so that I can file bankrupt and include this loan in it?

Asked on October 2, 2011 under Bankruptcy Law, Oklahoma

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

You should speak with a bankruptcy law attorney: there are two main types of bankruptcy for individuals, Chapter 7 and Chapter 13, and I believe that Ch. 13 does includes at least some protections for co-signors. The two types of bankruptcy are very different, and so it may be that Ch. 7 is the better choice for you personally (it's the one where your assets are liquidated to pay creditors as much as possible, then your debts are discharged), but since Ch. 13 (the one where you have to make payments per a court ordered plan for several years, before debts are discharged) will afford some protection to your grandather, you should at least consider it.

Unfortunately, there is no way to get your grandfather off the loan unless 1) you refinance the loan, or the loan is paid in full--and if you could do either of those, you  would not be looking at bankruptcy; or 2) the lender voluntarily agrees to let him off--and there is *no* reason they'd do that, since all  it does is reduce their chance of getting paid.


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