Getting a cosigner for a loan in Georgia is always a bad idea. Sometimes things happen beyond your control and you may not be able to pay for that car someday. If that happens, the car creditor is going to go after the easiest source of funds…….which might be your cosigner (usually it is a grandma). It does not matter who signs first or who signs second. Unless everyone who signed the contract files Chapter 7 bankruptcy, someone is going to pay for the debt. Family love goes out of the window when the creditor starts calling.
If you file a Chapter 13 bankruptcy, you can protect your cosigner but you will have to pay contract interest. If there are no cosigners, we might be able to pay only the value of the vehicle and pay an interest rate that is lower than the contract rate. In Georgia, Chapter 13 bankruptcy cases work much better when there are no cosigners.
I have clients in Dalton, Rome, Cartersville, Hiram and Dallas Georgia who have to deal the with the cosigner issue and probably wish they go back in time and undo it.
If some Georgia car salesman tells you that you need a cosigner to buy the car, run away from him as fast as you can. They may be promising you a lower interest rate or they may say they can’t do the deal without the signature of another person who is willing to cosign for the debt. In either case, you should run (see what Georgia consumer expert Clark Howard has to say about cosigning a loan).
A few months ago, I was meeting with a client in my Dalton GA office whose sister cosigned for a loan with him. After he lost his job, the car was repossessed. Within a few months of the repossession, he and his sister were sued by the car creditor. Needless to say, family relations were stressed. If he had filed a Chapter 7 bankruptcy, the car creditor would have collected the deficiency from his sister. Fortunately, he was able to find another job and we were able to file a Chapter 13 bankruptcy and pay back the entire balance with interest to protect his sister.