Shelby, MI Bankruptcy Law Firms & Lawyers

Yes, her liability to pay is discharged through bankruptcy. Yours is not. You can continue to pay the debt, or if you do not want to do so you need to negotiate with the creditor to come to a resolution or file bankruptcy yourself. If she took on the liability to pay in the divorce then potentially the debt is nondischargeable in bankruptcy. Whatever you pay the creditor to resolve the debt you can collect from her.

They cannot garnish the pension at the source which is the government. However, once the money is deposited into your account they can garnish the account. Thus once it is in your account the entire amount can be garnished.

In a Chapter 7 bankruptcy, you need to be current with your car if you want to keep it. If you aren't current, the lender could come into Court on a motion for relief and ask the Judge to lift the stay (protection) to allow them to repossess your car. If you are current, you will have to sign a reaffirmation agreement that basically states that you are reaffirming the loan and therefore if you default after your bankruptcy discharge, you will be responsible for the deficiency amount when they repossess and sell the car at auction. The deficiency amount will be the difference between what you owe minus the amount received at auction, plus costs. This can be sizeable. Your co-signor may also be responsible for the debt. You may want to consider a Chapter 13, that may allow you to keep the car and pay it off at the retail value as opposed to the loan amount. You should see a qualified and experienced bankruptcy attorney to look at all your options.