If you file for Chapter 7 bankruptcy and local bankruptcy laws allow you to exempt all of the equity you have in your car, you can keep the vehicle—as long as you’re current on your loan payments. To determine how much equity you have in the vehicle, subtract your current loan balance from the car’s value.

If you are the cosigner of a loan and you file bankruptcy, then you are no longer liable for the debt if the person you cosigned for stops paying. As long as they pay the debt, they can keep the vehicle and their credit history will not be affected by your bankruptcy filing.

Cosigners don’t have any rights to your vehicle, so they can’t take possession of your car – even if they’re making the payments. What a cosigner does is “lend” you their credit in order to help you get approved for an auto loan. A cosigner must have good credit and agree to make any payments in case you’re unable to.

If the car loan goes into default and results in car repossession, you’ll be equally liable for that too, including any deficiency balance. As the cosigner, you and the borrower are equally responsible for paying the deficiency balance—and could be taken to court.

Removing Your Name From a Cosigned Loan If you cosigned for a loan and want to remove your name, there are some steps you can take: Get a cosigner release. Some loans have a program that will release a cosigner’s obligation after a certain number of consecutive on-time payments have been made.

Option #2: Refinance the Loan Whether you’re a cosigner or a co-borrower (or, for that matter, if you’re the only one listed on the loan at all), you can always try to refinance in your own name. You’ll need to be able to qualify for a new loan based on your own good credit and income.

Fear not, as there are two main ways to remove your name from a joint auto loan: refinancing or selling the vehicle.

1. Refinancing. If the other co-borrower wants to keep the car and you want your name removed from the loan, they can try to qualify for refinancing.
2. Sell the car.

You can ask the person using the money to make extra payments to pay off the loan faster. If you are a joint account holder on a credit card or line of credit, the best way to get out is to pay off the debt or transfer the balance and then close the account.

Yes, that’s absolutely possible. If you’re going through a separation or a divorce and share a mortgage, this guide will help you understand your options when it comes to transferring the mortgage to one person. A joint mortgage can be transferred to one name if both people named on the joint mortgage agree.

6 ways to get out of a bad car loan

1. Refinance a car loan.
2. Renegotiate a car loan.
3. Pay off a car loan.
4. Trade in a car to get rid of a bad loan.
5. Surrender the car to the lender.
6. File for bankruptcy.

Voluntarily surrendering your vehicle may be slightly better than having it repossessed. Unfortunately, both are very negative and will have a serious impact on your credit scores.

Prepayment. Prepayment is one way to reduce your monthly payments and save money on interest. By paying a larger amount than what’s due, you’ll reduce the principal you owe. Dividing the smaller, remaining principal by the number of months left on your loan will result in a lower payment per month.