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Will your credit be damaged if you as a cosigner continue to make payments on a car loan when the primary signer declares bankruptcy?

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2004-10-06 20:29:39
2004-10-06 20:29:39

GET the car(if you want it), make arrangements with LENDER to do what they will expect you to do anyway....NO DONT pay for it and YES it will be bad

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If you are behind in your payments and you declare bankruptcy usually you can remain in your home and continue payments. However the lender will most likely begin foreclosure since you can't afford it and you are at higher risk.

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The primary borrower is responsible for making the payments and adhering to the terms of the lending contract. The cosigner is legally obligated only if the primary borrower defaults on the lending agreement or files bankruptcy (chapter 7).

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Only if the primary has said s/he will surrender the property in the bankruptcy and/or if the cosigner does not make the payments due.

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The card holder is under no legal obligation for the card holder to continue making payments after filing for bankruptcy, unless the case is dismissed without a discharge. There are some who believe that they can improve their credit rating by pay off debts that were discharged in a bankruptcy, but I believe there are better methods to reestablish credit after bankruptcy.

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A cosigner basically is a guarantor for the repayment of a loan or value and serves as cosigner of the debt. If the debtor fails to make payments or defaults, the cosigner is obligated to pay off the debt. No benefits for the cosigner, but cosigner benefits the debtor.


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