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2 min read , published March 03, 2015
Justin Harelik Justin Harelik Written by Justin Harelik The Bankruptcy Counselor
Justin Harelik
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Dear Bankruptcy Adviser, How can I get a vehicle loan through my name? I can’t get anyone to refinance it, and my ex-boyfriend is not paying. Is bankruptcy my only option? — Anna Dear Anna Although I earn an income from working on the bankruptcy process, I hope you are able to find a way around the mistake you made in your judgment particularly if this is your sole debt. Co-signing on an loan is among the most common reasons people file bankruptcy. You signed the contract and you agreed to pay for it, and now you’re paying the price. The lender will not remove your name off of the loan just because you and your boyfriend are no longer together. Just as the lender does not have a say in your dating choices the same applies to your loan. It also doesn’t have a input into your decision to separate. It does, however, sign a contract with you to repay the balance of this loan. Additionally, there is no incentive to allow you to get out of the agreement until it is paid in full. There are four options available at this point Pay the balance Hopefully, you can utilize the vehicle for the balance payment and can afford the payment. This will protect your credit and eventually gets you the title for the vehicle. Find someone else who will take over the payment: you could have a friend pay the balance and drive the vehicle. You’re still 100% responsible for paying off the car, but you can convince someone else to help. Maybe a family member can take a percentage of the payment and you can pay the remainder. Make sure all drivers have adequate insurance. Don’t allow anyone to drive your vehicle without having insurance to be able to do so. Return the car to the lender and it could be as a repossession in the credit file. The lender will sell the car and then send you a check for the balance remaining after the sale, called the deficiency balance. You will have to pay that balance. Ignore the problem: The lender will continue to repossess the car and pursue you for the amount due. I’ve heard from clients that they would bring a lawsuit against the responsible party and make them pay. This is a good idea in theory, but finding a way to make the responsible party pay is very difficult. If you figure out how to do this, you can start your own co-signer collection company as it would be impressive indeed. Best of luck! Ask the adviser To ask a question of the Bankruptcy Adviser, go to the «Ask the Experts» page and choose «Bankruptcy» to select the topic. Read more columns and more about debt management.
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Written by Justin Harelik The Bankruptcy Adviser
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