Date registered: Mar 2005
Vehicle: '01-E320 & 02-ST2
Location: John 15:18-19
Mentioned: 0 Post(s)
Quoted: 35 Post(s)
I love the fact that so many people seem to "know" so much about the law.
1. Bankruptcy is FEDERAL law. However, it most often incorporates the laws of the state wherein the debtor resides as regards exemptions.
2. Cascade has not told us where the mother resides. So please stop guessing about what she can keep and can't. It can't hurt to consult with a BK lawyer, but that's about all you might be able to suggest.
3. Clearly we don't know all of the story. It does appear however that they don't live in a state where collision insurance is mandated by law. We don't know what he told the insurance company if anything.
4. Sue the parents? Who do you recommend should do that, the enabling mother? Wow. The creditor certainly won't do this, they already have an obligor with assets who is clearly liable (the cosigning mom). The mom would have to hire her own lawyer and pay by the hour (no attorney is going to take this on a contingency fee) and the legal fees would exceed her current liability. She would have to prove liability not only of the ex BF, but then find a legal basis to extend that liability to his parents. Good luck, any defense attorney will easily win the last of those arguments in a motion for summary judgment. Let's not forget, he is not the proximate cause of this loss, it's the daughter who crashed the car. And that's where the point of liability has to start. So for $20-40K in legal fees she has a very, very slight chance of winning a comparative negligence verdict against the BF and perhaps the parents after a few years of litigation. In the meanwhile she will still have to pay the lender...or did you all forget that point?
5. Anytime you cosign a debt you are personally promising to pay the remaining balance if the primary obligor(s) default. Period. The lender doesn't have to sue them first or anything, all they have to do is notify the co-obligor of the default and demand payment. Depending on the wording of the contract they may be able to accelerate the note and declare it all due and payable upon the default of the primary obligor(s) and I wouldn't be surprised if that's the case here because it is no longer a collateralized loan.
6. Assuming mom doesn't want to file bankruptcy, she has two realistic options. Try and negotiate a deal with the lender that will reduce the amount of the outstanding debt and then either see if they will take payments on it or borrow against her house and pay off the balance. (The latter is still the smarter option.) If she goes to them with a specific cash offer of a reduced amount because she takes a second, they are more likely to work with her than if she just thrashes about avoiding the inevitable.
7. Cascade, tell her to call a Bankruptcy Attorney, most will give her a free initial consultation. She can tell the story and get some straight information based on the laws where she lives, and at least then she knows if that is a realistic option even if she chooses not to take it. If it is a realistic option, she can use that as a bargaining chip in negotiating with the lender for a reduced payoff.
Last edited by Check Codes; 03-26-2009 at 06:19 PM.