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My mom co-signed for a car we purchased. I defaulted on the payment. I switched jobs and I had to change my bill due date and that’s when it all started. I had to pay late fees, and it just escalated. The bank ended up taking the car. I was reading on a few articles about car repossessions and I learned so much like tow fees, storage fees, and defiency loan I have to pay back. My mom still doesn’t know the car is gone, I am so scared to tell her. I am for sure that I owe money on the car when they sold it to the auction. I would just pay the difference but do you know if they accept payment arrangements? I am thinking of filing for bankruptcy, how will this affect the car loan and what happens to my moms credit? Will the bank put a lien on her properties? Please advise. Thank you.

2 Comments »

1. 

   Well don’t be surprised if your Mom does not already know. A creditor will usually not contact a co-signer if it is only a month late. However, once it gets to a couple of months they often(but not always) will contact the co-signer.

   Because you defaulted on the loan it has already effected your moms credit in a negative way. When she co-signed for the loan she said she would take responsibility for it if you could not pay. So this Repo not only shows up on your report but it is on her’s also.

   It has become harder to declare bankruptcy. So you may not get a Chapter 7(liquidation) but a Chapter 13(repayment) in this case you may still be required to pay back all or part of the debt. Then depending on your exact situation they still may be able to go after your mom for the remaining amount due. The best thing to do is talk to a bankruptcy attorney and find out your exact situation. However, know that bankruptcy is a final step and unless this is a huge amount(several thousand dollars) it would be better in the long run to attempt to make arrangements with the bank.

   Comment by OC1999 — July 4, 2010 @ 6:39 am

2. 

   They may accept payments arrangements. You can contact them and find out. They don’t have to, but they might be willing to. If you file bankruptcy, your mom will still be liable for the difference. It depends on your state’s laws, but they can probably garnish her wages if she has an income, and they may be able to put a lien on her home. They would rather get a monthly payment from you than put a lien on her property, however.

   Comment by lawgirl — July 4, 2010 @ 6:39 am

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