Expert: David - 1/15/2009

Question
hello... i am in a huge whole in desperate need of your advice.

i am 22 yrs old and in june 2008 i leased a 2008 honda
cr-v, in my mothers name and myself as the co-signer. previously my mother had filed for backruptcy i believe chapter 7, and it didnt show up when we purchased the vehicle (everything was all "honky dory".  7 months down the line, now, january 2009 i was late on a payment and im guessing the way this happened is that the leasing bank called my mothers bankruptcy lawyer and asked her if she owned a car.  my mother told her lawyer that she didnt own it that i (the daughter) owned it. she claims she did that so she wouldnt get in trouble w/ her lawyer, not knowing if it would cause her bankruptcy any problems. the car has now, i dont know if im putting it in the right terms, but its been put/added w/ her bankruptcy.

the leasing company american honda finance, told me that as long as i made the payments i wouldnt have any repo problem.

so now im trying to either re-finance the car or just get a loan in my name to aliviate the car from my moms bankruptcy because the car is mine... not hers.  with my credit score at 610, it not much that a bank will offer to give me in a loan, but i am shopping around and there is a auto dealer that was finacially helping me with the issue, that say that i can get approved but the new bank would see that i have a current auto loan open.  and they would ask, how would i make the payments on both loans w/ my income.

how can i get me car out of my moms hot mess?

can i let the bankruptcy take over my car?
...how will that affect my credit?

if chapter 7, states that its a "no pay back" bankruptcy,
can i add the car to the bankruptcy and the let the bankruptcy satisfy my auto loan?... or would the car be repo and i will be stuck with paying it off?

i need your helppp!!...

is there something that i can do about this...alternatives, do i have other options?

desperatly awaiting for your advice...  

Answer
Yani-

It sounds like quite a situation.  Unfortunately your mother's position as the primary loan holder does mean that it is her car and it is rightly added into her non-discharged chapter 7 bankruptcy. The question is whether you are going to keep the car and repay the loan.

If the car is repossessed that will negatively affect you since as  a cosigner you are responsible for the payments.

If Honda can rewrite the loan for you based on your payment history that would be an ideal situation.  I'm unsure of what the other auto dealer is doing for you unless they are trying to arrange a trade of vehicles.  If not you will have two loans on your record and that might disqualify you if your income can't show how you can afford it.
If you are doing a trade this might be good for you in this situation.