It depends on what your intentions are
and which type of bankruptcy you file. If you don’t want
the car and want to discharge the debt, you can list it on
your chapter 7, but the co-signer must be made aware that
he will be responsible for the entire debt. If you want to
keep the car and keep making the payments and you are
current on your payments, you can reaffirm the loan on the
chapter 7. You and the co-signer would then both still be
legally responsible for the loan after you receive your
discharge. If you are behind three payments and the threat
of repossession is in the air, a chapter 13 would be the
best option to keep the car and pay the balance during the
course of the plan. By making all the payments in the plan,
the co-signer would be protected from any legal actions by
the creditor for the balance of the loan until you receive
your discharge.