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Auto lease with co-signor - when (if) to file bankruptcy?

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Auto lease with co-signor - when (if) to file bankruptcy?

It's been a long decision, but I've decided to file bankruptcy.

I'm trying to decide the most responsible way to file, specifically because of a co-signed auto lease. My lease is expiring and am about to sign a new very shortly - however I needed a co-signor, because of obvious issues.

I will assume the lease in the bankruptcy and continue to pay - however I'm really concerned about any effects to my co-signor. I've been approved with them and I've technically already committed to another lease by making a deposit / informal agreement. I'm a little confused on what I should do here:

1. Start new lease, file bankruptcy - concern here is co-signors credit (again I will fully assume the lease and make full payments).

2. File bankruptcy immediately before signing new lease. Not sure this will have any effect on the lease terms etc. or if this even makes a difference. Financing has already run credit/etc. for the vehicle and approved, so I don't know if this is even possible.

My only concern is protecting co-signors credit - appreciate any advice.

Valued Contributor

Re: Auto lease with co-signor - when (if) to file bankruptcy?

You really need to talk to an attorney. You may have a problem opening new credit right before filing. You'll also need the courts permission to obtain credit during the bankruptcy. Does your cosigner know you're filing BK? It wouldn't be good to ask someone to cosign and not tell them. This will show as IIB on their credit report.

EQ 778 EXP 782 TU 729
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Frequent Contributor

Re: Auto lease with co-signor - when (if) to file bankruptcy?

The whole reason for a co-signer is to have someone else responsible if you default.

I'd guess that filing BK with a co-signer on the loan will be bad for the co-signer.


2/2019 - EQ 789// TU 777 // EX 783
3/2016 - EQ 615 // TU 605 // EX 621
155k CC, 9 accounts.
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Valued Contributor

Re: Auto lease with co-signor - when (if) to file bankruptcy?

You don't want to sign for anything new if you're about to file BK.


Let your current lease expire, turn it in, keep your cosigner out of all of this.


Scrape together some cash for a cheap used car. Get discharged, get your reports clean, and a few months beyond that you should be able to get a fairly decent rate on a used car loan on your own without a cosigner.

Ch 7 Discharge May 2015
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