- 1). File for Chapter 7 and pay the associated fees at the federal bankruptcy court that has jurisdiction in your place of residence. Except in the case where the debtor has no assets, the bankruptcy trustee orders the sale of belongings to pay back creditors. This sale may include the car that your former spouse signed for on a loan. If the bankruptcy case ends in a discharge of debts, the balance owed after the sale of the vehicle will no longer be your responsibility. Your former spouse, however, is responsible for repayment of any debt remaining after the sale.
- 2). Propose a repayment plan that includes all debts when you file for debt relief under Chapter 13 and pay the fees required in the federal court in your state of residence. The bankruptcy court reviews the plan. After going over your proposal, the court approves, denies or approves with modification, the plan you put forth in your bankruptcy filing. The bankruptcy court may modify rights of creditors with respect to secured claims. Any alteration of the contract is solely at the discretion of the bankruptcy court. Payments defined through the repayment plan are paid directly to the bankruptcy trustee, who distributes the funds to creditors.
- 3). Reorganize with Chapter 11 by filing your petition at the federal bankruptcy court, which has jurisdiction in your home area. In this chapter of the federal bankruptcy code, a debtor files a comprehensive plan of reorganization with the court. The plan should include enough information to allow creditors to judge the plan on its merits. As with the Chapter 13 repayment plan, your reorganization may include the vehicle on which you had a cosigner and still owe money. Creditors study and vote on the reorganization plan. A confirmation hearing occurs after plan ballots are tallied. If the court deems the plan acceptable, and the creditors concur, the case moves forward with plan payments made through the bankruptcy trustee, much the same as a Chapter 13 case. Unless the court rules otherwise, any debt not paid off in the reorganization plan may become the responsibility of your cosigner.
- 4). File for Chapter 12 bankruptcy if you are a family farmer or family fisherman who has a regular annual income. Generally, you must also pay the required fees at the time of filing your petition. This section of the bankruptcy code allows the debtor to repay debts in much the same way as a person who files for Chapter 13 relief. File your repayment plan with the federal bankruptcy court that serves the area in which you live. If your situation involves family farming or fishing enterprises and your co-signed vehicle is included in the repayment plan, the court may modify the secured loan at its discretion, thus reducing or significantly changing your co-borrower's responsibility under the purchase contract.
- Advertisement -
- Advertisement -