What Happens to the Co-Signer of a Car Loan in Bankruptcy?

When considering bankruptcy, many people want to know: What happens to the co-signer of a car loan in bankruptcy? Co-signers are sometimes used by borrowers when their credit score is too low to qualify for a loan on their own.  The co-signer takes on responsibility for the debt if the borrower defaults and can be targeted by creditors during bankruptcy proceedings.

If you’re a co-signer on an auto loan, it’s important to understand what happens to that debt in a bankruptcy situation. If the primary borrower files for Chapter 7 or 13 bankruptcy, then the lender may attempt to collect from both parties even though only one filed. This can mean garnishing wages or income tax refunds for both parties.

The Law Offices of Omar Zambrano has helped thousands of the people and businesses in the past to get out of debt and start over.

Our goal is to help you find a fresh start FAST!

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