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Vehicle after Chapter 7 for Co- signer

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Vehicle after Chapter 7 for Co- signer

So I co-signer for a truck for my then girlfriend ( now Wife) 2 years ago. She filed a chapter 7 last year and kept the truck. About a month after discharge we contacted the lender to get an reaffirmation done. They said they do not do reaffirmations and to continue to pay the payment and we were fine. I contacted the lender a few months later to ask If I could make $500 payments for a few months and didn't want to risk it being repossessed. They said that was fine. I just got a letter to both of us saying we owe $1000 plus the next original payment or they repossess.
Here is the thing, they say they can not report anything to the credit reporting agency since it's in BK proceedings and there is no financial liability. That said, in the 28 months we had the truck it has never showed on either of our credit reports. If I surrender the truck can they report now after 28 months?
Message 1 of 3
Senior Contributor

Re: Vehicle after Chapter 7 for Co- signer

Well, I think you have things to worry about than what's reported to credit reporting agencies. As your wife filed Ch7 BK she's has no financial responsiblity, but as co-signer they can come after you for any deficency - amount of loan + fees minus what they sell it for. And that's real easy to happen, they sell repossessed vehicles at wholesale auction and pad the loan balance with fees & charges.


What's the value of the truck ( vs. how much you owe on it? If you've been paying on it for 28 mos. I'm guessing it;s worth more than you owe? Anyway you can come up with the $$$ they want? They can't report your payments on either of your credit reports because the debt was discharged for your wife & they don't report payments on co-signer's report. If they get a deficiency judgement against you that will most definately be reported on your credit report.

Message 2 of 3
Moderator Emerita

Re: Vehicle after Chapter 7 for Co- signer

Is it possible for you to refi the truck away from that auto lender?


If you have been paying for 28 months you should be in a positive equity position or close to it by now.  What is the make, model, year and milage of the vehicle? What is it worth? How much do you owe?


Dave is right about your consequences if you fail to catch up on your payments though. The refi is one possible long term solution - but there may be other options better for you.

Message 3 of 3
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