This past week I have received calls asking about co-signers in a bankruptcy. In particular, what happens to cosigners of my loans or credit cards and how will that effect my bankruptcy?Technically speaking, if a person has co-signed a loan for you and you file for a Chapter 7 bankruptcy, the co-signer will still be legally obligated to pay the debt. Although your debt has been discharged if your bankruptcy has proceeded successfully, the co-signer will still be on the hook for the debt. You should be aware that the co-signer should be listed as a creditor in your bankruptcy petition since they might have a claim against you. However, if you file for Chapter 13 bankruptcy, the creditor will leave your codebtor alone, as long as you keep up with your bankruptcy plan payments. So depending on who you want to protect, that could influence your decision on what Chapter to file.
Article by Kiran Bisla
Attorney at Law
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