My Co-Debtor And My Unsecured Debt

Posted by Col Ovik on March 3, 2022 at 7:30 AM
Col Ovik

shutterstock_1742377289Before filing bankruptcy many debtors try other means of dealing with their debt. Occasionally debtors will take out additional debt in hopes of consolidating the debt. But for the creditors to provide additional credit to a potentially risky lender they may ask that the debtor obtain a co-signer on the debt. This co-signer will remain liable on the unsecured debt even after the debtor has received a discharge in the bankruptcy.

So the question is often posed: what will happen to my co-debtor. The answer is: if the debt remains unpaid the co-debtor will be pursued by the creditor (this includes being sued) and the co-debtor’s credit will be negatively impacted by the unpaid debt. If one co-debtor files bankruptcy, it does not make the other co-debtor more or less liable on the debt. The debt itself was always jointly and severally liable by both parties, this means that your co-debtor is not just liable for half of the debt, they are and were liable for the entire debt. The bankruptcy did not cause your co-debtor to be liable for the entire debt, the co-debtor was always liable on the entire debt. And once one of the debtors has filed bankruptcy, there is only one person left for the creditor to pursue.

When considering your joint debt, especially joint debt regarding divorces, where both parties have agreed to pay half of the debt, it is imperative to remember that the creditor did not agree to hold each party to only half of the debt, the creditor will hold both parties equally responsible for the entire debt. In order to protect your joint debtor someone has to keep making payments on that particular unsecured debt to prevent the co-debtor from suffering any ill effects from the lender.



With joint debt both parties are jointly and severally liable on the debt even after one party has filed for bankruptcy. Contact the attorneys at LifeBackLaw and see us at  and let us help you get your life back.


Topics: debt relief, unsecured debt

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