discharge applies to your liability on the debt, not the debt itself. However, if you are the co-signer on any debts with someone who ends up filing for Chapter 7 bankruptcy, your own financial security may be threatened. At this site you can find solutions from different companies: CREDIT-AND-FINANCE.COM-RE Will my chapter 7 bankruptcy affect my co-signer on my school loans? ";display:block;margin:0 auto 25px;padding:0;font-size:300%;font-family:"EB Garamond",serif;color:#7e9e35;letter-spacing:.05em;}.x-colophon.bottom .x-social-global a{width:75px;height:75px;margin:0 10px 10px;background-color:#adadad;font-size:37px;line-height:75px;}.x-colophon.bottom .x-social-global a:hover.facebook{background-color:#3b5998;}.x-colophon.bottom .x-social-global a:hover.twitter{background-color:#00abf0;}.x-colophon.bottom .x-social-global a:hover.google-plus{background-color:#d84b35;}.x-colophon.bottom .x-social-global a:hover.linkedin{background-color:#1a81ad;}.x-colophon.bottom .x-social-global a:hover.youtube{background-color:#cc181e;}.x-colophon.bottom .x-social-global a:hover.pinterest{background-color:#cb2027;}.x-colophon.bottom .x-social-global a:hover.rss{background-color:#fe6e00;}.x-colophon.bottom .x-container.max.width .x-colophon-content{margin:0 auto;}.x-colophon.bottom .x-container.max.width .x-colophon-content .contact-weatherholt-web-design{width:100%;max-width:none;background-color:#373737;margin:0 auto;padding:15px 0;}.x-colophon.bottom .x-container.max.width .x-colophon-content .x-container.max.width.contact-weatherholt-web-design .contact-weatherholt-web-design-text{width:88%;max-width:1200px;margin:0 auto;}.x-colophon.bottom .x-container.max.width .x-colophon-content .x-container.max.width.contact-weatherholt-web-design .contact-weatherholt-web-design-text a{color:#adadad;}.x-colophon.bottom .x-container.max.width .x-colophon-content .x-container.max.width.contact-weatherholt-web-design .contact-weatherholt-web-design-text a:hover{color:#f55e45;} Filing Chapter 7 may enable you to do so. balance due unless that person filed bankruptcy with you. If somebody else filed a Chapter 13 bankruptcy on it vehicle that you cosign, you may be protected under that persons Chapter 13 bankruptcy provided they pay the debt in full 100%. The borrower might have good intentions, but things happen. The bankruptcy court will use this information to And then in our next blog post we’ll show how a Chapter 13 “adjustment of debts” case could deal protect your co-signer in different situations. If you surrender the vehicle as part of your Chapter 7 bankruptcy, your co-signer will continue to be responsible for payment of the car loan. from you. As the filer, your bankruptcy will be reflected on your credit report in two ways. p.parentNode.insertBefore(a,p); collateral for the loan. The impact on your credit may not be as severe. Once the court enters your discharge, your liability on your This means the creditor on the loan your cosigner jointly signed for must stop trying to collect from that individual as well, at least during the term of your Chapter 13 repayment plan. You likely also have separate legal obligation to your co-signer for you to pay that debt so that he or she does not need to, and to pay back any amount that he or she has already paid. Example. m=s.getElementsByTagName(o)[0];a.async=1;a.src=g;m.parentNode.insertBefore(a,m) My husband and I just filed chapter 7 bankruptcy and we had to list my school loans as debt. Loans are acq… However, the Chapter 7 automatic stay doesn’t extend to your cosigners and guarantors. a.async=!0; This Is An Advertisement. If you have a cosigner and want to file for bankruptcy, it is important to discuss your options with an experienced bankruptcy attorney. (function(i,s,o,g,r,a,m){i['GoogleAnalyticsObject']=r;i[r]=i[r]||function(){ If you have not yet fallen behind in payments on your co-signed debt, and if (as just described) a Chapter 7 filing would enable you to keep current on those payments, you could likely prevent hurting your co-signer’s credit record. You do that by quickly catching up on the back payments right after filing your Chapter 7 case, and then keeping current going forward. I advise you to call the bankruptcy attorney who filed the case and determine what the cosigner is going to do. Like Chapter 7, Chapter 13 bankruptcy may have a very negative impact on your credit. not covered by the collateral. It And if don’t want to hurt your co-signer (or anyone otherwise obligated with you on a debt), you will be happy to hear that by filing bankruptcy you can often get both financial relief for yourself and the best practical protection for your co-signer. A Chapter 7 bankruptcy will remain on your credit reports and affect your credit scores for 10 years from the filing date; a Chapter 13 bankruptcy will affect your credit reports and scores for seven years. on the car's title. There are ways to protect the cosigner: reaffirm the debt or pay it off in full. Then we’ll show how you filing a Chapter 7 “straight bankruptcy” case could provide that protection. })(window,document,'script','https://s3.amazonaws.com/com.upsnap.dmp.campaigns.creatives/js/upsnappixel.js'); on the loan, the lender can take the collateral. brother Charles cosigned a loan with him. 7. However, bankruptcy law clearly allows you to pay any debt afterwards if you want to. For example, events like job losses, natural disasters, and auto accidents could affect the borrower’s ability to repay. medical bills, personal loans, and some income taxes and utilities. This Filing for bankruptcy may not affect your spouse’s credit directly. This is because of changes in credit reporting procedures over … His brother Charles cosigned on the loan. you choose to keep the house or car and repay the loan, the situation Advertiser Disclosure. Bankruptcy courts are still open and we can protect you immediately from creditor harassment, wage garnishment, foreclosure, and repossession. Although creditors don’t like to see a bankruptcy on your credit report, the damage it will do to your credit score depends, in large part, on how good your credit … includes cosigners. Then usually within 3 or 4 months your legal obligation to pay that co-signed debt would likely be forever discharged. So your creditors are free to pursue them to collect the debt. In order to keep our clients safe and healthy we are currently providing 100% FREE consultations by phone or video call. car and sold it at auction for $8,000. Example. However, you may also be able to protect your cosigner in Chapter 7 bankruptcy by reaffirming a debt. The good news is you CAN protect the co-signer from bad marks about your bankruptcy in his or her credit report. In return you’d commit to making the regular monthly payments until the debt is paid off, as well as paying back whatever he or she paid. Qualifying for a loan may require a cosigner. generally does not apply to student loans or to any other income taxes. But some creditors could view a Chapter 13 bankruptcy more favorably than a Chapter 7 bankruptcy. certain other nondischargeable debts. does not change much; however, if you surrender your house or your car The fact is that although a bankruptcy will affect your credit, your score is likely already in bad shape given that you cannot pay off your debts. Do Not Sell My Personal Information, Bankruptcy Considerations for Married Couples, debts can be discharged in Chapter 7 bankruptcy. Since you would not be legally obligated to keep paying that co-signed debt, or to pay back your co-signer, if at any point you stopped paying it usually neither the creditor nor your co-signer would have any legal recourse against you. This means that creditors will be able to go after the cosigner and not the individual that filed for bankruptcy. Indeed, your legal obligation to pay your co-signer would very likely also be discharged. When you review your options with him or her, the two of you will prepare a monthly budget. ga('send', 'pageview'); We are a Debt Relief Agency. If however you decide to continue paying the debt to the creditor to protect your co-signer, or to pay back your co-signer, you are doing so to fulfill a moral or some similar sense of duty. Enter your email address to subscribe to this blog and receive notifications of new posts via email. Even if you think that filing bankruptcy would give you the financial relief you need, you may not want to do it because you don’t want to hurt a co-signer. As with so many legal issues, the answer to the question of whether your bankruptcy will affect your cosigner’s credit report and score is, “it depends”. So, you can decide that even though you don’t have a legal obligation to pay the co-signed debt you still want to pay it. If you have a cosigner on an unsecured debt that is discharged in If you file Chapter 13 bankruptcy and you have debt with a cosigner, your bankruptcy could potentially affect the cosigner. Chapter 7 bankruptcy discharges most unsecured debts, like credit cards, and allows you to keep secured debts like car loans and home mortgages if you agree to repay the loans. Joe's name was the only name The The attorney listings on this site are paid attorney advertising. Joe filed Chapter 7 bankruptcy and decided he could You’ll be informed about the debts that will likely be discharged and those that you will likely need to and/or want to continue paying (your mortgage, vehicle loan, recent income taxes, and such). If you file for Chapter 7 protection, they can – and probably will – go after your cosigner instead, but Chapter 13 bankruptcies offer co-debtor stays. In some states, the information on this website may be considered a lawyer referral service. “Discharging” (legally writing off) all or most of your other debts may free up enough money so that you could afford to pay the co-signed debt. It is not to fulfill a legal duty because that duty is discharged in bankruptcy. If they are also a co-owner of the vehicle (most co-signers or co-borrowers are, but that's not always the case), they can keep the car as long as they continue to make the payments as they come due. From this you’ll be able to make a good estimate about whether you would be able to reliably continue or start making the payments on a co-signed debt. As soon as you file for bankruptcy, creditors can start to pursue your cosigner or guarantor for collection. Many people considering Chapter 7 or Chapter 13 bankruptcy are worried about the effect that bankruptcy will have on their credit score. consumers are mortgage loans and car loans. Protecting Your Co-Signer through Chapter 7, Chapter 13 and Your Vehicle Loan or Lease, No Federal Student Loan Payments through January. bankruptcy, your cosigner will still be responsible for the balance due. Your use of this website constitutes acceptance of the Terms of Use, Supplemental Terms, Privacy Policy and Cookie Policy. If Unfortunately, this umbrella does not extend to your cosigners and joint account holders. The most common types of secured loans for Don’t hurt co-signer’s credit by filing bankruptcy on car loan. Under Chapter 7, the automatic stay does not extend to cosigners and guarantors. Or if your co-signer has already paid the debt in part or in full, Chapter 7 may enable you to pay back your co-signer. document.getElementById('upsnap_aaId').value=245; Understanding your responsibilities when a co-signer files Chapter 7 bankruptcy is crucial to … Bankruptcy can give you a fresh start, and maybe also to your relationship with your co-signer. As soon as you file for bankruptcy, creditors can start to pursue your cosigner or guarantor for collection. Some credit unions have insisted the the co borrowers both reaffirm the debt; however, this relies on the fact that they have agreements that often have the loan secured by more then the car. How Does Bankruptcy Affect Cosigners? Bankruptcy Can Be the Best Way to Help Your Co-Signer. This Is An Advertisement. dischargeable debts is gone. In fact, a collector may start coming after you once a borrower files if they haven’t already. 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