What is the co signee responsibility after bankruptcy has been filed?

Asked on Feb 02nd, 2011 on Bankruptcy - California
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My grandmother bought a car for me and I co signed it. I left for boot camp when she filed bankruptcy afterward and the bank repossessed the car. I did not get a notice until today which is 3 years from then that I have to pay off $10,000. Do I have a legal defense on this case or can I fight it?
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Answered on Feb 03rd, 2011 at 5:58 PM
When your grandmother filed bk she got herself out of the liability for the car note that left you still liable. When the car got repossessed the company must conduct a sale and get a reasonable price. Then they can sue you for the deficiency. You can pay $10,000. negotiate a better deal or file bk yourself.

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Answered on Feb 03rd, 2011 at 8:43 AM
As the co-debtor, you remain fully liable for the debt. You may have an issue re notice. This is a state law collection issue, not a bankruptcy issue unless you intend to file bankruptcy. If you file bankruptcy the deficiency should be discharged.

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Answered on Feb 03rd, 2011 at 7:58 AM
No defense. You so-signed so you are liable for the deficiency.

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Answered on Feb 03rd, 2011 at 4:28 AM
You might but you should consult with an attorney to see what the best options are for you.

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Answered on Feb 02nd, 2011 at 11:43 PM
The vehicle was repossessed because the bank was not paid. If your name was on title and the loan then you were a co-debtor and co-owner. If you only agreed to pay if your grandmother would not pay then you were a co-signer only. Either way you are liable for what is still owed. The fact that you just became aware of the debt does not matter. You probably did know the bank repossessed the vehicle. You just did not think they were going to come after you after so long. After 4 years you have the defense of the statute of limitations. However, if you have been outside the state part of the time the 4 years limitation is extended. If you are served with a summons and complaint you need to see an lawyer. You might want to see a bankruptcy lawyer, particularly if you have other debt outstanding.

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Answered on Feb 02nd, 2011 at 6:13 PM
Cosigners are liable for the debts that they cosign for. This is true even if the person that you cosigned for files bankruptcy. In that case, you are left as the only one still responsible to pay the debt. You can try to settle the debt for less or defend a lawsuit, but in the end, if you cosigned for a debt and you do not file bankruptcy yourself, you will be held responsible for the debt.

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Answered on Feb 02nd, 2011 at 5:43 PM
You may have several defenses. I handle consumer debt defense cases.

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