What happens if my friend-s wife co signed on a loan for my motorcycle but now she is going to file for bankruptcy?
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What happens if my friend-s wife co signed on a loan for my motorcycle but now she is going to file for bankruptcy?
Will this affect me? Am I at risk of loosing my bike? I have made all the payments on time,.
Asked on August 6, 2014 under Bankruptcy Law, Arizona
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 9 years ago | Contributor
The bike will only be repossessed if payments are not made on time and in full. Assuming they are, the dealer or lender (whoever provided the financing) has no interest in repossessing the motorcycle--they want your money, not the bike. What the bankruptcy means is that if you default and suffer any loss--repossession of the bike, say, or else being sued by the lender from the remaining balance of the loan--you will be limited in your ability to sue the co-signor to recover money from her. It also means that in the event of a default, the lender will go after you, not her, because the bankruptcy will protect her.
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