Co-Sign for an Auto Loan After Bankruptcy

by Debra
(Sullivan County, NY, USA)

Question: Can I cosign for an auto loan after bankruptcy? My daughter wants a car loan but can not get approved on her own due to 586 credit score.

They told her if she had a co-signer they could work with her. I just filed bankruptcy (last month) and was wondering if I could co-sign.

I have a steady job and had great credit until recently. I had to file bankruptcy (chapter 7) because my husband passed away and I couldn't afford payments without his income.

I kept my car through the bankruptcy. My score is now 678. It was in the high 700's prior to bankruptcy. Would a bank or credit union approve me as a co-signer for my daughter?


Answer: Hi Debra,

Unfortunately, I don't think your credit would do much to help your daughter at this point. It's not so much that you had a bankruptcy, but the fact that it is so recent.

Carrying your car loan through the bankruptcy will certainly help you in your rebuilding efforts, but most of the better lenders will look for 18-24 months after BK before they would give you yourself another loan let alone cosign for an auto loan after bankruptcy for someone else.

If it's simply your daughters credit that is affecting her approval, then it sounds like the dealership she is working with is not very good at what they do. I get customers with 500 credit scores approved all the time. Not bragging, but am just saying that it is certainly possible.

Where you may be able to help her is with some money down as that is a key to helping getting customers with lower credit scores approved.

I know you just filed BK, because you were short on money, but maybe the both of you can save up $1000-$1500 (the more the better) to help her with a decent down payment.

In addition, you may want to work with another dealership that is more geared to helping customers in your daughters situation. You may want to have her take a look at Auto Credit Express to see how they might be able to help.

Hope this helps to clear things up some and good luck to both you and your daughter.

Take care,
Justin