I have a car loan and my brother was the co-signer. If I filed for bankruptcy, will it affect my brother's credit reports? 25 Answers as of March 18, 2013

I am planning to file for bankruptcy chapter 7. I loaned a car and my brother co-signed for me. If I filed, will it affect my brother’s credit standing. Will it show up on his credit report?

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Gateway Legal Group | Christian J. Albut
If you file bankruptcy, your brother will be responsible for the car. If your brother doesn't pay for the car then it will effect his credit and it may have already if your are behind in payments.
Answer Applies to: California
Replied: 3/18/2013
Durham Jones & Pinegar | Erven Nelson
So long as someone keeps making the payments, his credit should not be hurt.
Answer Applies to: Nevada
Replied: 3/8/2013
The Law Office of Darren Aronow, PC
The Law Office of Darren Aronow, PC | Darren Aronow
Bankruptcy will not show on his credit but any late payments for the car will show on his credit.
Answer Applies to: New York
Replied: 3/8/2013
Ross Smith, Attorney at Law
Ross Smith, Attorney at Law | Charles Ross Smith III
If you file for bankruptcy, it will not show on your brother/co-signor's credit report. But your brother's credit will be affected, if the payments are not continued on the car in a timely manner. You will be discharged from any obligation to pay on the car. But your brother will remain obligated to pay for it. Your best option may be to file, keep the car and continue the monthly payments on it. Do not "reaffirm" on the car. Just keep it insured and make the payments. Unless your lender is like FOMOCO or Santander, they will not in sist on a "reaffirmation." BTW, this is not territory for a novice to explore. You'll need an attorney to explain all the matters that you will bump into.
Answer Applies to: Ohio
Replied: 3/8/2013
Law Office of Erik Severino | Erik Severino
Yes, your upcoming bankruptcy could affect your brother's credit. Assuming you wish to retain the vehicle, you will be required to "reaffirm" the car loan. By reaffirming the loan, the loan will still show up in good standing on both of your credit reports. But if you wish to surrender the vehicle, and thereby discharge your liability to the car loan, then this will severely hurt your brother's credit once the payments stop and the account is discharged in your bankruptcy.
Answer Applies to: Nevada
Replied: 3/8/2013
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    It will not show up on his credit report (if does that is an error and he can dispute it).
    Answer Applies to: California
    Replied: 3/8/2013
    Law Office of Susan G. Taylor
    Law Office of Susan G. Taylor | Susan G. Taylor
    It won't affect his credit as long as the car is paid timely.
    Answer Applies to: Texas
    Replied: 3/7/2013
    Law Office of Joanna North
    Law Office of Joanna North | Joanna North
    When one party who is joint on an auto loan files bankruptcy, the other party who is on the loan is still responsible for the debt. However, If the auto payments remain current, the credit report of the co-borrower will not be affected.
    Answer Applies to: Oregon
    Replied: 3/7/2013
    Troutman & Napier
    Troutman & Napier | Gregory A. Napier
    If your brother pays the full amount on the loan then it will not affect his credit, but as a co-signer, he is 100% responsible for the debt. Only in a Chapter 13 can a co-signer get some protection. You, as the Chapter 13 debtor would be able to propose a plan that pays 100% of the debt in order to protect the co-signer over time.
    Answer Applies to: Kentucky
    Replied: 3/7/2013
    Bordeaux Law, P.C.
    Bordeaux Law, P.C. | Clifford Bordeaux
    If you reaffirm the debt in your bankruptcy case (or just continue making all of the payments without reaffirming), your brother should not be affected.
    Answer Applies to: California
    Replied: 3/7/2013
    Guardian Law Group PLLC
    Guardian Law Group PLLC | C. David Hester
    The bankruptcy will not show on his credit but he will still be liable for the auto loan even if you are discharged.
    Answer Applies to: Utah
    Replied: 3/7/2013
    Law Office of D.L. Drain, P.A.
    Law Office of D.L. Drain, P.A. | Diane L. Drain
    It might, but if it does he can file a dispute with the credit reporting agency.
    Answer Applies to: Arizona
    Replied: 3/7/2013
    Stephens Gourley & Bywater | David A. Stephens
    It will not affect his credit report as long as you keep paying the debt. If you stop paying, he will have to pay or it will affect his credit report.
    Answer Applies to: Nevada
    Replied: 3/7/2013
    Mari Morrison Attorney at Law | Mari Morrison
    It will show up on his credit report that he co-signed for a debt and unless you pay the debt and reaffirm, he will be held responsible for payment of the debt.
    Answer Applies to: Alabama
    Replied: 3/7/2013
    A Fresh Start
    A Fresh Start | Dorothy G Bunce
    As consumers, we see what is on our consumer reports. All a creditor wants to see is the FICO score which is an extrapolation of the information on the consumer report. It is likely that the creditor financing the vehicle will report that this debt is involved in a bankruptcy & will stop reporting payments on it to the credit bureau. That is what your brother's consumer report will say. To the extent that making the car payments on time have helped his credit score, this help will come to an end, even if the payments continue to be made on time. Mistakes can happen and should the creditor report that your brother is in bankruptcy, this obviously would hurt his credit score and he should promptly dispute this error.
    Answer Applies to: Nevada
    Replied: 3/7/2013
    Goldsmith & Guymon
    Goldsmith & Guymon | Marjorie Guymon
    If you keep your car, and reaffirm the debt, it should have no effect on your brothers credit.
    Answer Applies to: Nevada
    Replied: 3/7/2013
    Bruning & Associates, PC
    Bruning & Associates, PC | Kevin Bruning
    Even worse than affecting his credit rating, if you file for bankruptcy and default on that car loan, he will be completely liable for the loan. The auto loan company would most likely seek the full balance from him. However, most auto lenders are willing to permit you to reaffirm the debt, meaning that your personal liability for the car loan would continue through the bankruptcy. You should talk to an attorney to discuss whether this is a viable option for you.
    Answer Applies to: Illinois
    Replied: 3/7/2013
    Steele, George, Schofield & Ramos, LLP
    Steele, George, Schofield & Ramos, LLP | Alan E. Ramos
    It will if he doesnt make the payments.
    Answer Applies to: California
    Replied: 3/7/2013
    Deborah F Bowinski, Attorney & Counselor at Law | Debby Bowinski
    If you continue making payments and keep the car it shod be okay. If you surrender the car and discharge the debt the lender will be able to collect the remaining funds from your brother.
    Answer Applies to: Colorado
    Replied: 3/7/2013
    Reger Rizzo & Darnall LLP | Kathleen DeLacy
    Not the bankruptcy but the lender can go after him for payment.
    Answer Applies to: Delaware
    Replied: 3/7/2013
    214bankruptcy.com
    214bankruptcy.com | Rustin Polk
    His credit report may or may not have this particular listed on it. He will have to pull a copy of the credit report and see. If this loan is listed on his credit report, the lender may or may not report that it has been included in your bankruptcy case. Either way though, his credit report will not show that he filed a bankruptcy.
    Answer Applies to: Texas
    Replied: 3/7/2013
    Law Office of Stuart M. Nachbar, P.C.
    Law Office of Stuart M. Nachbar, P.C. | Stuart M. Nachbar
    The Car loan company, unless you surrender the vehicle, will look to your brother to repay the loan. You can always reaffirm the debt and keep making payments and keep the car.
    Answer Applies to: New Jersey
    Replied: 3/7/2013
    Law Office of Lynnmarie A. Johnson
    Law Office of Lynnmarie A. Johnson | Lynnmarie Johnson
    Yes, generally it will show up that, assuming you are reaffirming the car, that the car has been reaffirmed in a bankruptcy. Your brother is entitled to put a 300 word explanation on his credit report, you just contact the credit reporting bureaus and they either send the form or he may be able to do it on the internet, explaining that he was the co-signer and that he did not go bankrupt you did.
    Answer Applies to: Michigan
    Replied: 3/7/2013
    Attorney at Law | David Holbrook
    As long as the car payments are made on time, his credit will be fine.
    Answer Applies to: Georgia
    Replied: 3/7/2013
    Musilli Brennan Associates PLLC
    Musilli Brennan Associates PLLC | John F Brennan
    Yes, if the car loan with him as cosigner is on his credit report as outstanding credit, when you file bankruptcy or failed to make the payments, the delinquency will show up on his report. He will have to make the payments if you file bankruptcy and have it discharged as to you. If the payments are not made they will also repossess the car.
    Answer Applies to: Michigan
    Replied: 3/7/2013
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