If I want to file Chapter 7 and my sister co-signed for a car for me, since I owe $8500 and it’s worth only $2000, will they make her pay the $6500?

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If I want to file Chapter 7 and my sister co-signed for a car for me, since I owe $8500 and it’s worth only $2000, will they make her pay the $6500?

Asked on December 9, 2012 under Bankruptcy Law, Michigan

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

Under federal bankrupotcy laws if you get a discharge as to the debt and are not responsible for it as to the car, your sister as a co-signer under the loan would then be expected to pay off the balance of what is owed under the contract.


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