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Debra
Debra, Lawyer
Category: Canada Law
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If a car loan is included in the debt personal bankruptcy

Customer Question

If a car loan is included in the debt for a personal bankruptcy can it be discharged if the car loan has a cosigner. Cosigner has died and estate is disputing the validity of banks request to request a cosigner.
Submitted: 1 year ago.
Category: Canada Law
Expert:  Debra replied 1 year ago.

The way this works, unfortunately, is that if one co-signer declares bankruptcy the other becomes liable for the full debt.

The bank has a right to enforce the debt against the co-signor because this is exactly why the bank wants a co-signor in the first place. It wants someone to pay if the debtor does not.

If the co-signor dies then unfortunately the estate is liable to the bank.

I am sorry about that.