What to do if I co-signed on a loanbut the other party filed bankruptcy and now I’m being sued for the debt?
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What to do if I co-signed on a loanbut the other party filed bankruptcy and now I’m being sued for the debt?
My ex-girlfriend filed bankruptcy on the car and it was repossessed. Now the loan company is suiing me. The car was resold and they are coming after me for the negative balance of close to $7,000. I never had a notice that she was filling bankruptcy or her delinquency on the car note. They never told me they were selling the car. Now they want me to pay for the rest and have nothing to show for it. I have a checking account with the loan company and I have been to the bank several times cashing checks paying a different loan and not once did I ever know of anything going on.
Asked on July 26, 2011 Tennessee
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
If you were the co-signer for a loan on your ex-girlfriend's car, you are on the hook for any deficiency of the car's sale after a repossession and subsequent sale most likley. By signing on the loan, you agreed to be bound by the loan's payment terms amongst other things.
However, you may have certain defenses. First, read the loan agreement carefully as to notice provisions for any repossession and subsequent sale where a deficiency on the loan could result. If required notice did not happen and if state law on the auction sale was not complied with, you might not be liable for the deficiency of $7,000.00.
Also, if your ex-girlfriend did not list you as a possible creditor on her bankruptcy filing, you potentially could bring a lawsuit against her for payment on the deficiency regardless of her bankruptcy discharge.
You should consult with a bankruptcy attorney and an attorney versed in automobile auction notice requirements about your situation.
Good luck.
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