Does anyone know the laws concerning a co-signor

I believe under the new bankruptcy laws a cosigner is only protected under a chapter 13 filing. The creditor can pursue you for the balance owed.

Cosigners remain responsible for debts that are discharged in another's bankruptcy. In Chapter 13 you may protect cosigners if a plan is filed which proposes paying the cosigned claim in full. This is true of debts guaranteed by others, whether you signed first or the other did.

You may want to talk to an attorney in your area to make sure the above info is correct. I don't know if it's different in Alabama, but most of the new bankruptcy laws are federal now, so things don't differ much from state to state.

They can't make you keep the vehicle. If the other person does give it back, you may still be held responsible for whatever balance is left after they auction it off.

Unfortunately, the creditor can come after you as the co-signer if the other person on the note files a chapter 7. :( They can come after you for the balance left over when they sell it at auction. And whatever they write off they will send you a 1099 (I believe that is the form used which will have to be included on the following year's income tax return)