If you file for bankruptcy and you can’t afford to keep the car, you’re no longer legally obligated to pay that debt. However, the payments are still due on the car, so, the co-signer will need to step in and make those payments. That’s why it’s important that you have money saved up if you choose to be a co-signer. It’s a painful situation to one or both parties, but I see it happen all the time. Watch the video for more information.