How Does Bankruptcy Affect Cosigners?
How Does Bankruptcy Affect Codebtors?
Our Knowledgeable Lawyers Are Ready to Help You
Bankruptcy offers many benefits, but it is important to also understand the risks involved before filing. One of the potential risks is that codebtors of loans or other debts may be left solely responsible for the debt after you file. Bankruptcy may discharge the filer's obligations, but typically will not relieve the non-filing codebtor of his or her obligations.
The attorneys at Redman Ludwig, P.C., have been helping individuals and couples file bankruptcy in Indiana for decades. We understand all aspects of bankruptcy law, including how filing affects your codebtors. After reviewing your debts and finances, we will discuss your debt relief options as well as the effects bankruptcy may have on other parts of your life.
Discharging vs. Repaying Your Debts
When a bankruptcy is filed, non-filing codebtors of any debts that are included in the filing may be held liable for the remainders of the debts. This is more common with Chapter 7 bankruptcies because the filer's obligation will be discharged for unsecured debt. With secured debt, the filer can surrender his or her claim to the interest or asset.
Under Chapter 13 bankruptcy, the filer can agree to repay his or her debt with the codebtor over a three- to five-year period. If the bankruptcy is successfully completed, the codebtor should not be affected. Should the filer be unable to complete the repayment plan, the codebtor may be held liable.
Contact an Indianapolis Bankruptcy Firm
For a free telephone consultation, please call 317-800-6181 or toll free at 866-660-6928, or contact us online.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.