MY SON DEFAULTED ON A CAR THAT I CO-SIGNED FOR HIM. HE JUST LOST HIS JOB SO THEY ARE GOING AFTER ME. CAN YOU HELP?
At TaiebLaw we have heard this so many times. Parents will do anything to help their children. In this situation, this client had an extremely bright son who graduated at the top of his class and was making 6 figures. However, due to personality clashes, he was let go from his job and it took him months to find another job and the pay is 50% of what he was earning. Since the father had substantial income, Credit Acceptance is now going after him for the $26,000 deficiency.
The whole purpose of bankruptcy is to help honest people get a fresh start.
If you quality, you are eligible for a Chapter 7 which totally wipes out all your debt. However, if you have debts secured by collateral such as a home or auto payment, you must continue to make those payments or you will lose that property. Also, you must be under the median income to qualify for Chapter 7. In addition, you are only allowed to own a certain amount of property. If you are above the exemptions, a Chapter 7 trustee will sell your non-exempt property.
In New Jersey the median income is very high so many clients of TAIEBLAW qualify for Chapter 7 since the median income is as follows:
Family of 1 – $66,284
Family of 2 – $81,054
Family of 3 – $98,174
Family of 4 – $121,226
For each additional family member, the number increases $8,400.
However, if you are still over median income, then you can still stop the creditor from pursuing you. You just have to pay a certain amount of your total debt back in a Chapter 13 plan if after your deductions you are still not eligible for Chapter 7.
However, if you are in this situation since you are responsible for the debt since you co-signed, help is still available.
If you find yourself in this situation or have any questions concerning this matter or any other matter contact TAIEBLAW at 856-235-4994 or visit our website at TAIEBLAW.COM, and schedule a FREE initial consultation.
Steven N. Taieb, Esq. has been a South Jersey Bankruptcy Attorney for over 33 years and is board certified in consumer bankruptcy law by The American Board of Certification which is accredited by The American Bar Association.