Hi, I recently (3 months ago) bought a used car, I took out a loan and my mom co-signed it, however, my job cut back my hours and it is becoming very hard to pay it off, as I am also a college student and am finding it hard to come up with money for college...the car loan is around 13,000, and ive only payed off about 500 dollars of it so far, also i have about 2,000 in credit card debt, and 1,000 in student loans...will declaring bankruptcy hurt my mother too, since she cosigned for my car? And what would happen to my car and loan?

In Canada, bankruptcy only covers unsecured debts (debts that are not secured by an asset such as a vehicle.) If you were to give the car back when you file for bankruptcy, the rest of your obligation for the debt would be covered. The creditor, however, would look to your mother to pay any amount owing after the car has been sold and proceeds applied to the car loan.

Ann Clarke
phone: (403) 296-2972
aclarke@moneyhelp.ca