Cosigner on vehicle included in Chapter 7 bankruptcy

Since the borrower included the debt in the bankruptcy, Chrysler is only allowed to go after him for the collateral -- they cannot sue him for the balance. However, they can sue you since you are a co-signer that didn't go bankrupt.

Generally, they would take posession of the vehicle and sell it. They will apply any proceeds from the sale of the vehicle to the account. Any remaining balance is legal for them to go after you for.

EXCEPTING, there may be certain provisions in your state law that further restrict what they can/can't do, depending on how much of the loan has been paid. For example, in Illinois under the Motor Vehicle Retail Installment Sales Act, if at least 60% of the payments have been made, then Chrysler could either 1) take the car back, but they can't sue for a deficiency balance, or 2) they can sue for the full balance, but have to let you keep the car ... But they can't take the car AND sue. Again, these little provisions are specific to each state.

Depending on the balance, will determine how far Chrysler will go to get their money. If it ends up being $5000 or less, they will probably call you and send letters, but usually won't sue over a small balance. As the balance gets higher, they will get more aggressive with their approach, and eventually sue for it.