If you are thinking of filing bankruptcy or have already filed and have a co-signor on a debt that is included in your case, you may be wondering what happens to the co-signor after you file?
The co-signor is still on the hook and liable for the debt even though your personal liability on it is included in your bankruptcy discharge. As long as the debt continues to be paid on time, per the terms of the debt, the co-signor should not be impacted credit wise, by the bankruptcy filing. If payments were late or missed the co-signors credit will be impacted, just as it would if a bankruptcy hadn’t been filed.
After a bankruptcy is filed online access and automatic payments will likely stop for the debt, even if there is a co-signor. This means, if the debt is continued to be paid, it will likely have to be paid by mail, in-person (when available) or by phone. Even though your co-signor did not file with you, typically online access and automatic payments will stop for the both of you.
In a chapter 13 there is what is called a co-debtor stay. This prevents creditors from trying to collect on certain debts from a co-signor, even if that person has not filed bankruptcy themselves. Generally, this means the creditors will not send statements or try to collect on the debt, even though the co-signor may intend and want to keep paying. The co-signor will have to voluntarily make payments going forward, if they chose to.
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