Legal Question in Bankruptcy in Maryland

Repossession after bankruptcy

I am a co-signer on a car loan. The person who was buying the car filed for bankruptcy and that has been discharged. The credit company had not informed me or the buyer that the car was being repossessed after the discharge. Car payments were four months in the rear. In order to get the car back, they are asking for five payments plus towing charge. I, as the co-signer was never given the opportunity to make the payments before repossession. I would like to know if I can take over the payments on the car and get it from impound without paying the full amount the company is requesting. As a co-signer, should I have been given the opportunity to take the payments before repossession.


Asked on 10/15/02, 12:33 pm

1 Answer from Attorneys

G. Joseph Holthaus III Law Offices of G. Joseph Holthaus

Re: Repossession after bankruptcy

Without knowing the capacity in which you co-signed, no definitive answer can be provided.

Did you sign as a guarantor of payment or did you sign as a payor in default? The specific terms of the co-signment agreement is at issue. Moreover, you did not indicate the type of bankruptcy filed by the primary debtor. Based on your statement, I assume a Chapter 7, in which case the debt has been dissolved against the assets of the bankrupt estate and it is not likely that a potential course of action lies. As a co-signor, you should have received notices of demand for payment long before the bankruptcy was filed (assumming as is usually the case that a vehicle loan went unpaid).

Depending on various factors, if you would like to assume payments on the asset and it has not otherwise been liquidated in satisfaction of the debts held through the estate (i.e., a Chapter 13), you must act quickly.

Contact me to file a notice of interest in the asset, and to assume payments, where the asset is available for such with creditors having an interest. In this case, a creditor having an interest may welcome an offer for agreement but this needs to be done properly. Such an action, depending on the type of bankruptcy filed, may also be of benefit to the person who filed the petition for bankruptcy.

G. Joseph Holthaus III

(410) 799-9002

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Answered on 10/15/02, 10:01 pm


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