Legal Question in Bankruptcy in Maryland
Car bankrutcy with a co-signer
A nineteen year old and his step-Mother buy a vehical. Both are on the title, her name first. One year later the step-Mother wants to file Bankruptcy. Can the step-son (who has make all the payments, on time) keep the vehical?, if not, how will this effect his credit?
1 Answer from Attorneys
Re: Car bankrutcy with a co-signer
Yes, provided there is not too much equity in the vehicle. As long as the payments are current, the lender cannot repossess the car, bankruptcy or no bankruptcy. However, if there is more equity in the car (value of the car less the amount owed on it) than can be exempted, the trustee could take the car to satisfy creditor claims. In most car loans, there is little if any equity until the loan is nearly paid off, but you will need to check this.
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