Legal Question in Bankruptcy in Michigan

Whether the car can be taken by the trustee depends upon who owns the car. If your mother in law owns the car, her trustee may be entitled to sell it. I would need to know the value of the car, the amount owing on the loan, whether the loan was properly secured by the lender being listed on the title, and whether the owner claimed an exemption in the car. And I would need to know where the car is titled (what state, for example).

If you are obligated on the loan and it is not paid, that fact may be shown on your credit report. It should not be reflected as a "bankruptcy" and if the loan is paid it should be reflected as having been paid. Note that if some of the payments are late, that fact might be reflected on your credit report.

This answer is for discussion purposes only and does not constitute legal advice.