Legal Question in Bankruptcy in Texas

I'm co-Signer on car loan & filed for Ch. 7

I co-signed for a friend's car and recently filed for Ch. 7 bankruptcy. The legal assistant told me at the time of filing that I could keep my own vehicle, and relinquish my interest in the vehicle I co-signed on. I was told this wouldn't cause my friend to lose his car, it would just take my name off the loan so that's what I did. My friend pulled a copy of his credit report today, and it shows that the car was included in Ch. 7 bankruptcy and has been discharged. Is this a mistake? I just wanted my name off the title, but I don't want the car to be repossed b/c of me. Is there some form I need to fill out---I filed for bankruptcy in Feb & went to court in March. Thanks!


Asked on 4/11/02, 11:36 pm

1 Answer from Attorneys
Andrew Nichols Law Office of Andrew B. Nichols

Re: I'm co-Signer on car loan & filed for Ch. 7

Short answer -- the car should be safe from repo.

Credit reporting services and creditors operate by using account numbers. Most of the time this works to the benefit of debtors but not always. Unfortunately in your case the car finance company received the bankruptcy notice which was correct but the employees that input the info in their database and report it to the credit bureaus are not savvy enough to know the difference between a co-signor and the actual borrower on the loan. They just enter the account number as a bankruptcy account.

The good news for your friend is that as long as the car payments are made the creditor cannot repo the vehicle. The biggest problem will be when your friend attempts to get a new car. He/She will need to document that they did not file bankruptcy. If you want to start early to rectify this send a letter to the car finance company along with a copy of your bankruptcy and also send the same letter to the credit bureaus. ph. (800) 303-0720

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Answered on 4/12/02, 8:50 am


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