' Does Filing Bankruptcy Affect Cosigner - Law Offices of Robert M. Geller
CALL NOW!
FREE PHONE/VIRTUAL CONSULTATION

How Are Co-Signers Affected by Bankruptcy?

Does Filing Bankruptcy Affect Cosigner Tampa Bay Attorney Robert M Geller.Co-signers and Bankruptcy

If you’re considering co-signing a loan for a friend or family member, or you have a loan with a co-signer, it’s important to understand the implications, especially if you or the primary borrower is considering bankruptcy. Co-signed loans are handled differently than individual loans in bankruptcy.

The most important thing to realize as a co-signer is that your credit can be negatively impacted if the person for whom you have co-signed files for bankruptcy. And if you are filing for bankruptcy, anyone who has co-signed for you will be affected when you file.

Specifically, a loan with a co-signer that is discharged in a bankruptcy filing might still be the responsibility of the co-signer to pay. You might be off the hook when you file, but your co-signer could still be pursued by the lender.

Co-signing for a loan makes a person legally responsible for a debt. It doesn’t matter what is discussed between the primary person borrower and the co-signer, nor does it matter what the financial situation is for either party. No matter the private arrangement, the lender will do all it can to pursue payment and usually this means trying to collect from the co-signer when the primary borrower is unable to pay.

Furthermore, lenders and creditors report the debt to the credit bureau for both the primary borrower and the co-signer. If you are considering co-signing for a loan, you should view yourself as a co-debtor because you will be held equally responsible for the debt.

To learn more about how co-signing for a loan can affect your credit, read this information from FreeCreditScore.com and Experian.

Can a Loan that is Co-Signed Disqualify Me for Bankruptcy?

Having a co-signer won’t affect your ability to file for Chapter 7 bankruptcy. The co-signer’s income won’t factor into your bankruptcy and their ability to repay the co-signed loan won’t make you ineligible to file. The debt will still be discharged in your bankruptcy and the creditor will no longer be able to pursue you for repayment. It can, however, pursue the co-signer. Your bankruptcy provides no protection to the co-signer of the discharged debt.

Chapter 13 bankruptcy does provide a bit of protection to co-signers of a loan listed in the bankruptcy. This is because Chapter 13 is a structured repayment plan, so creditors do receive payments toward the debt. Creditors cannot pursue collections in full on a debt that is current in a Chapter 13 plan. However, if the debtor defaults on his or her Chapter 13 repayment plan, the co-signer can be held responsible for the debt.

It’s common for people considering bankruptcy to have co-signed loans. Sometimes people who eventually file for bankruptcy had little credit to begin with and needed co-signers or they were struggling financially when they accepted the co-signed loan. Unfortunately, everyone can end up losing out if bankruptcy eventually becomes necessary, even if the intentions were originally good.

If you are considering bankruptcy or you have co-signed a loan for someone who is considering bankruptcy and you have questions, we can help. Contact the Bankruptcy Law Office of Robert M. Geller at (813) 254-5696 to schedule a free bankruptcy lawyer consultation.

Archive

Video Testimonials

Tampa Bankruptcy Law Blog

Can a Bankruptcy Discharge Be Revoked?

Filing for bankruptcy is a difficult decision that can have a significant impact on your finances and future. Fortunately, bankruptcy...
Read More

How is Marital Debt Divided?

Filing for bankruptcy is a complex process and becomes even more complicated when marital debt is involved. Marital debt refers...
Read More

What is Skip Tracing in Debt Collection?

When you lend money to someone whether it is for personal or business reasons, it’s especially difficult when they don’t...
Read More

What Happens at the End of a Chapter 13 Bankruptcy?

Dealing with bankruptcy is never easy. However, if you find yourself in a situation where you need to file for...
Read More

Can My Wages Be Garnished for My Spouse’s Debt?

Marriage is a partnership that often extends to financial issues, including debt. Unfortunately, not all spouses see eye to eye...
Read More

What Happens When You Get a Court Summons for Debt?

Getting a court summons for debt can be an overwhelming and frightening experience, but it doesn't have to be. Despite...
Read More

Can a Debt Collector Serve You Papers at Work?

Debt can feel overwhelming and stressful, especially if you have creditors calling you at work. Many people wonder whether this...
Read More

What to Do If a Debt Collector Threatens You?

Dealing with debt collectors is stressful and challenging. Even under the best of circumstances, contact from a debt collector is...
Read More

What You Need to Know about Updates to Student Loan Bankruptcy Discharge Laws

Are you struggling to make ends meet because of hefty student loan debt? The good news is that you may...
Read More

What is Considered Harassment from a Debt Collector?

Being in debt is never easy, but it’s especially devastating when you're being harassed by debt collectors. Of course, debt...
Read More

Bankruptcy

For The Next 5 Days GET A FREE BOOK About Bankruptcy

Learn More

Infographics

We are A Debt Relief Agency.
We help people file for bankruptcy under the Bankruptcy Code

Pay Online Bankruptcy Courses Newsletter Subscription

Call For A Free Initial Consultation

813.254.5696

Tampa Office

Law Offices of Robert M. Geller, P.A.
807 West Azeele Street
Tampa, FL 33606
T: (813) 254-5696
T: (800) 853-7549
F: (813) 253-3405

Map And Directions

St. Petersburg Office

Law Offices of Robert M. Geller, P.A.
125 5th Street South
(Wells Fargo Financial Center)
2nd Floor, Suite G
St. Petersburg, FL 33701
T: (727) 532-3939

Map And Directions

Pasco Office

23526 State Road 54
Lutz, FL 33559
T: (813) 336-2320

Map And Directions