Question: My husband walked out one night in April of this year. We shared a bank credit card and I co signed for our jeep which only has him on ownership. The bank called about overdraft and visa. They told me that he declared bankruptcy in British Columbia on the 22nd of October. He has the jeep with him. We have a two year old daughter (he never bothered to have contact with)I have a part time job of 15-20 hours a week. The bank is telling me that even if he goes bankrupt that I am soley responsible for the jeep loan and visa and over draft. I do not want to declare bankruptcy so could you tell me what options I have. It doesn’t seem fair that he gets to keep the jeep and I have to pay when raising my daughter on my pay with no assistance is really hard. But I do shutter at the thought of bankruptcy. We borrowed the money and we should have repay it.
Thank you for taking the time to answer my question and I appreciate any advice you can give me as I am worried sick about all of this. The Scotia Bank told me even if the judge says he is responsible that they do not recognize family law.
Answer: You have a number of options.
First, in most cases if vehicle loan payments are not made the lender’s first step is to seize the vehicle and sell it to recover some of their money. Only then do they pursue the borrowers for the shortfall. Therefore, in your case your first option would be to advise the bank that you do not have the money to pay them; you could tell them where the Jeep is located (they probably already know, since it would be contained in your ex husband’s bankruptcy paperwork), and you could leave it to them to pursue the Jeep.
They are correct in telling you that as the co-signer you are responsible for all of the debts. As noted above, your first option is to simply do nothing. It is possible that the bank will take you to court, but if your only income is from a part time job, it is likely that they won’t spend the money on going to court if they don’t expect to recover anything.
Another option would be to attempt to work out a settlement with them directly, based on your ability to pay.
A consumer proposal is another option, where you offer to settle for less than the full amount owing.
The final option is personal bankruptcy to eliminate your debts.
The correct option will depend in part on your prospects for the future, including whether or not your income is likely to increase in the near future. To evaluate your options, we suggest that you contact a credit counsellor or bankruptcy trustee for an initial consultation; they will review your options, and help you decide which option is best for you.
