If co-signed on a loan for my daughter’s motorcycle and now have to file for bankruptcy, will she lose it?
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If co-signed on a loan for my daughter’s motorcycle and now have to file for bankruptcy, will she lose it?
Asked on January 11, 2012 under Bankruptcy Law, Wisconsin
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
As a general matter, no--as long as the payments are made in full on time, per the financing agreement/loan, the lender should have no cause to repossess the motorcycle. The key issue for lenders in cases like this is just whether or not they are getting their payments.
To be certain, however, you should double check the financing agreement(s)--if the agreement contains a clause, term, or provision stating that the borrower will be deemed to be in default in the event she or a co-signor declares bankruptcy, that provision is enforceable; in that event, they could repossess, though are obligated to do so.
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