When considering filing a bankruptcy, people often wonder what will happen if someone else has co-signed their debt. In certain cases, having a co-signer is not an issue. If the debt is co-signed by spouses who are filing a joint bankruptcy, both will receive a discharge and there is no issue. However, if only one co-debtor files a bankruptcy, the other co-debtor could be left responsible for the entire debt.
When one co-debtor files for bankruptcy, their liability for the debt is discharged or wiped out. However, the co-signer remains legally responsible for that debt. Even if your liability is discharged, your co-signer remains liable. This means that the creditor can legally pursue the co-signer for the entire debt. This can include seeking a monetary judgment or repossession of collateral, such as a vehicle.
You may be wondering if there is any way to protect a co-signer from a creditor? A debtor can voluntarily choose to pay the debt in order to protect the co-signer from the creditor, or the co-signer can pay themselves. If you are wondering how filing a bankruptcy could affect others, it is important to speak to a bankruptcy attorney.
If you are dealing with an overwhelming debt problem, it is important to discuss your options with a bankruptcy attorney. If you have questions about bankruptcy and would like to do a free consultation to go over your options, visit www.lifebacklaw.com to speak with an attorney. You will be glad you did!