Legal Question in Bankruptcy in Indiana

Re: Filing on a defaulted co-signed loan

When you file bankruptcy you have to schedule all debts, even those you want to reaffirm on so you can keep the collateral such as your home.

Most people can keep all of their assets but each case is different-much will depend on your individual finances-also if you own the home jointly it may be totally exempt from creditors.

I recommend you consult an experienced bankruptcy atty-most offer free consultations-do it now since the debt at issue will only grow especially if they sue.

By the way, they cant just "take" your home-they have to get a judgement first, record it as a lien on the property and then foreclose thelien-this menas they would have to pay taxes and prior liens in full before they would realize anything on the judgement-my guess is that this is an idle threat since there probably isnt enough equity in the home for them to pursue foreclosure. Instead, they will wait until you sell or refinance to negotiate a settlement in exchange for a release of their judgement lien. Good luck!!

John E Bator

Bator Redman and Shive , P.C.

Re: Filing on a defaulted co-signed loan

Whether he can file JUST on that loan or not depends largely on what his budget looks like -- if it appears that he could make meaningful progress on paying the car loan over time, given the income that he has, then he might not be allowed to do a chapter 7 bankruptcy.

However, without knowing numbers, it would be impossible to answer that question.

Also, in case you were wondering, if he DOES meet the criteria to file a BK, then he could reaffirm (or agree to keep and keep paying on) the loan on the home.

So, in other words, he won't lose the home just because he filed a BK.

Hope this information helps.