Legal Question in Bankruptcy in Minnesota

Re: Reaffirmation Agreement

The cosigner would probably have more than a repo. After you surrender the vehicle, they may be able to go after the cosigner for part of the loan.

After the lender takes back the vehicle, there will be an auction or similar sale. Typically, they don't get enough from that to pay the whole loan. At that point the bankruptcy protects you from the remaining balance as long as you have not reaffirmed.

Your co-signer, however, is vulnerable to collection action for that remaining balance. This is why the cosigner should be listed as one of your creditors in the bankruptcy. After the lender goes after the co-signer, the co-signer can circle back and come after you - and the debt which you thought was discharged bites you in the posterior.

If the old car is still running, you might be well advised to keep paying on the old loan until it's full paid.

One more thing - get off the internet and talk to your bankruptcy lawyer about this. Your lawyer should be available for such questions - I always am.

This response is for general information purposes only and does not create an attorney-client relationship. You are advised to seek the advice of the attorney of your choice concerning the details of your case.