Bankruptcy Law Questions? Ask a Bankruptcy Lawyer Now.
Thank you for giving me the opportunity to assist you. I encourage you to ask me for clarification, if you are not clear with my Answer.
The situation is my best friend applied for a joint car loan while she was married to her ex husband, then they had a very ugly divorce and in the divorce paper he took ownership of the car and he has been paying for it with money he is getting from my friend since he does not have a job or money. Now he is threatening to file bankruptcy and she is afraid that the car loan will be her problem and her credit will be ruined because she has to pay off the car or the loan will be reported as in bankruptcy on her credit report. What can she do to protect her credit and money? I believe the players are loan debtors, ex husband (non cooperative) and credit report agencies
Response: The only way to protect her credit is to find money to pay off the car. Otherwise, once the ex husband files for bankruptcy protection , the car would be reported as in bankruptcy on her credit report. Also, if the ex husband is filing under Chapter 7, your friend would be solely responsible for the payment on the car if the ex-husband bankruptcy is successful--that is, if he gets a Bankruptcy Discharge.
However, since this a property settlement, she can sue her ex-husband to force him to pay her back the money that she paid on the car. Marital Property Settlement Agreements are not dischargeable in Chapter 7 bankruptcy and only dischargeable in Chapter 13 case after completion of the Chapter 13 plan. See 11 U.S.C. Section 523(a)(15)
I am sorry that I do not have better news.
DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.
The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).