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Phillips Esq.
Phillips Esq., Attorney-at-Law
Category: Bankruptcy Law
Satisfied Customers: 19472
Experience:  B.A.; M.B.A.; J.D.
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The situation is my best friend applied for a joint car loan

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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

thank you for your help

 

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.

 

 

Customer: replied 7 years ago.
Okay, so if the ex husband is motivated to cooperate,

can she take ownership on the car and make paynments, without credit trouble if he does not include the car in his bancruptcy, or she would be in trouple anyways if he files, even not including the car loan in the filing?
so does she really have to come up with the money before he files?

Can she remove his or her name from the loan if they both agreed to do that?

Thank you again these answers will be very helpful
Okay, so if the ex husband is motivated to cooperate,

can she take ownership on the car and make paynments, without credit trouble if he does not include the car in his bancruptcy, or she would be in trouple anyways if he files, even not including the car loan in the filing?

Response 1: Once the husband files for bankruptcy protection, the account would show on credit report as being in bankruptcy. Even if she pays off the account at that time. Alos, even if the car is being paid off, her ex husband must list the debt on his bankruptcy schedules.

so does she really have to come up with the money before he files?

Response 2: Yes. That is the only way that the account would be reported as being paid in full and not discharged in bankruptcy.

Can she remove his or her name from the loan if they both agreed to do that?

Response 3: No. That is not up to both of them. It is up to the lender. The only way her name can be removed is if he trades in the car and pays off the loan.

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