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

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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

Answers:

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.


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