Bankruptcy & Co-signers

Hey Paul!

I have one quick question for you…My mom has decided to file BK.  She has co-signed on a car loan that I have (she is primary, I am secondary) and is also a co-signer on my brother’s car loan (he is primary and mother is secondary).  When she does file for BK, (in Arkanssas)can she keep both cars? If not, how will her BK effect my credit? Are the lenders able to put it on my credit as a repo or BK?  Any advice would be great!

Amanda

PS:  DEU 15:7 “If there is among you a poor man of your brethren, within any of the gates in your land which the LORD your God is giving you, you shall not harden your heart nor shut your hand from your poor brother, 8 but you shall open your hand wide to him and willingly lend him sufficient for his need, whatever he needs.”

Though, this may speak of giving money, I just wanted to personally thank you for your knowledge and giving freely what God has given to you.  Thank you for being a good steward. 

——————

Hi Amanda,

The bankruptcy is not permitted to show on your credit report.  This used to be a common credit reporting error – one cosigner filed bk and the other did not and both had the bankruptcy notation on their reports.  The new Metro 2 format attempted to address that problem and for the most part, fixed it.

Your mom can keep the cars, but she’ll probably have to pay for them.  The payment history for the car loans will continue to report on your credit bureau and your brothers.   If the cars are repossessed, then your credit reports will be plagued with the repossession.  My recommendation is to make sure the payments are made on time regardless of the bankruptcy filing.

Thank you for the bible verses, Amanda.  I believe the bible is understood in three ways.  The bible is (1) a historical book, (2) a law book, and (3) a spiritual book.  Historians reference the bible and it has been shown to be a trustworthy map through time.  The moral lessons in the bible are also readily apparent.  The part that is most difficult to understand is the spiritual meaning. 

God defines his own terms in the bible, as we are commanded to compare spiritual things with spiritual things [1Cr 2:13].  A parable is an earthly story with a heavenly meaning.  Christ talked in parables [Mat 13:34].  Christ is the Word [Jhn 1:1] from the beginning and is spoken of as a merchant man [Isa 55:1], although what he is selling and what we are giving is the gospel itself.  I believe a ‘poor brother’ in this context is someone who is unsaved [Rev 3:17].

The next verse in Deu 15:9 has to do with the seventh year, which is referred to as “the year of release” and commands that we not withhold from a poor brother because the seventh year is at hand and intuitively if we lent to our brother, we would not get paid back.  So, we are to lend the gospel to our poor brother and expect nothing in return [Luk 17:10]; for ye are our glory and joy [1Th 2:20].

Thanks for the questions and hope this helps.

Paul