Expert: Terry Leeders - 6/22/2008

Question
Hello.   I filed for bankruptcy and was discharged a year and a half ago.  At the time I had a Volkswagen Jetta lease that was paid in full, but was still apart of my bankruptcy.  (My lawyer advised me to do this so that I was not responsible for extra fees and/or other things)  My mother co-signed on this loan for me.  I turned the car in in Jan. of 2007.  About 2 months ago, my mother received a letter from Volkswagen stating she owed them money for the return of the vehicle and for them to resell the vehicle.  I have also received letters recently stating that money is owed.  Is there a certain amount of time that these creditors can come after co-signers for the payment of things like this?  And is Volkswagen legally allowed to try and come after me for this even though my bankruptcy was discharged?  I do not want my moms credit to be affected by something like this and hope to resolve this situation as soon as possible. I look forward to hearing your answer.

Answer
Regardless of what you did in your case, your mom, as a cosigner can be held to the contract that she signed with VW.  If you turned in the vehicle early, then she would be responsible for the balance of the lease, minus what the creditor recouped in the resale.  Mom would need to read the car loan contract for her responsibilities,as the creditor can always go after her to collect on what is still owed.  Unfortunately, that is why creditors get cosigners, so that when one party doesn't pay, they can collect from the other.  Unfortunately, the only thing that the bankruptcy did, is discharged your obligation, it doesn't discharge a cosigner's obligation.