Ghai Law Firm
Call for a free consultation:
(770) 792-1000
  • ABOUT
    • Testimonials
    • Join Us
  • Practice Areas
    • Personal Injury
      • Pedestrian Accident
      • Car Accidents
        • Speeding Accident
        • Drinking and Driving Accidents
        • Left Hand Turn Accident
        • Rear-End Collision
        • Reckless Driving Accident
        • Uber Accidents
        • Hit-and-Run Accidents
        • Texting and Driving Accident
          • Texting and Driving Under 18
      • Truck Accident
        • Lane Usage Accident
        • Traumatic Brain Injury
      • Product Liability
        • Defective Drugs
        • Defective Medical Device
      • Premises Liability
        • Slip and Fall Accidents
      • Wrongful Death
      • Dog Bite
    • Bankruptcy
      • Debt Relief
      • Credit Card Debt
      • Chapter 13 Bankruptcy
      • Chapter 7 Bankruptcy
      • Foreclosure Bankruptcy
      • Free Legal Case Review
      • Medical Bills Bankruptcy
      • Rebuild Your Credit
      • Wage Garnishments
  • Areas We Serve
    • Kennesaw Personal Injury Lawyer
      • Kennesaw Bankruptcy Lawyer
    • Acworth Personal Injury Lawyer
      • Acworth Bankruptcy Lawyer
    • Marietta Personal Injury Lawyer
      • Marietta Bankruptcy Lawyer
    • Smyrna Personal Injury Lawyer
  • FAQs
  • Blog
  • Videos
  • Contact

How does my bankruptcy affect a co-signer on a debt?

Home » Kennesaw Bankruptcy Lawyer » How does my bankruptcy affect a co-signer on a debt?

Loose change and pocket cash
bankruptcy, signor, debt, chapter, creditor, loan, filing, attorney, marietta, credit

Filing bankruptcy is always a difficult decision and one that can be complicated by the fact that you have asked someone to co-sign a loan or credit card for you.  When you file a Chapter 7 bankruptcy petition or file a Chapter 13 repayment plan, your Marietta bankruptcy attorney should be informed that you have a co-signor or guarantor on any debt. The court will also require you to disclose co-signors on your bankruptcy forms.

How Does the Stay Impact a Co-Signor?

When your Marietta GA bankruptcy attorney files your petition for bankruptcy, all collection activities that the creditor is pursing against you must stop. However, bankruptcy protection extends only to your obligation to repay the debt, not to the obligation of your co-signor who has agreed to be liable for the debt in the event you default. In a GA Chapter 7 bankruptcy filing, the creditor will more than likely seek relief from the co-signor.  The rules are slightly different for Chapter 13 bankruptcy, in order to pursue the debt from your co-signor the creditor must show the bankruptcy court that (a) the co-signor gained some benefit from the loan they were co-singing for (b) the creditor will be irreparably harmed if they are unable to collect the funds or (c) there is no allowance in the Chapter 13 plan for the creditor to be paid.

For a free legal consultation, call (770) 792-1000

What About Secured Debts and Bankruptcy?

If your co-signor helped you get a loan for a home or automobile and you surrender the asset in a Chapter 7 bankruptcy filing, they will be responsible for the debt that remains under the original contract. Keep in mind, your filing protects only you from collection activities; it does not protect your co-signor or guarantor. The lender may sell the property after you surrender the asset and any remaining balance will be the responsibility of the co-signor.

What About Unsecured Debts?

In nearly all cases, if you had a co-signor on a personal loan or a credit card that is eliminated in bankruptcy your co-signor will be responsible for that debt. If the loan is partially paid through Chapter 13, and you fail to make any additional payments after Chapter 13 to that creditor, they may seek relief from the co-signor.

Since many debts that require a co-signor are reported to credit bureaus, once you file bankruptcy a notation will appear on both your credit report and the co-signors credit report that the debt is part of a bankruptcy petition. This notation will have a negative impact on their credit.

When you ask someone to co-sign a loan, it is never with the intention that you will be unable to make the payments. However, job losses and illnesses can often mean you have no option but to work with a Marietta bankruptcy attorney for relief from your debt. Do not let this action catch a co-signor off guard, let them know of your intentions.

Some debtors may find that Chapter 13 is a better option when filing bankruptcy if they have assets or unsecured debts that have a co-signor on them. However, keep in mind, that consumer debt is not considered “priority” debt so even under Chapter 13 in some cases, your creditor may not receive all that is owed to them. When you have secure debt such as a home or car with a co-signor, you may want to consider reaffirming the debt and continue making those payments if at all possible.

A Marietta bankruptcy attorney can help you make a decision about what chapter of bankruptcy offers both you and your co-signors the most protection. We understand that everyone’s circumstances are different and that each case must be treated individually.  Contact Roger Ghai, a bankruptcy attorney in Marietta at the Law Offices of Roger Ghai at (770) 792-1000 to discuss your individual circumstances.

Call or text (770) 792-1000 or complete a Free Case Evaluation form

Bankruptcy Blog Posts:

Bankruptcy Filings Continuing To Rise In 2010

Due to high unemployment and an uncertain economic climate, consumer bankruptcy filings in America have increased in 2010. According to statistics reported by the American Bankruptcy Institute, a

Chapter 7 Bankruptcy and Chapter 13 Bankruptcy Comparison

Good Morning, this is Roger Ghai of www.Chapter7attorneys.com. I wanted to do a little informational video on bankruptcy options. In particular, Chapter 7 bankruptcy options and Chapter 13 bankruptcy

Filing Chapter 7 Bankruptcy – January 2010 Talk Law Radio Show Transcript

Janice: Good afternoon Atlanta and welcome to News & Talk 1380 WAOK. This is Janice Mathis and we’re here this afternoon and every Sat. afternoon at 1pm to talk with one of our lawyers who’s

Difference Between Chapter 13 & Chapter 7 Bankruptcy – March 2010 Talk Law Radio Show Transcript

Janice: Good afternoon Atlanta and welcome to Legal Talk. This is Janice Mathis. This is my favorite hour of the weekend. I learn something new every weekend talking to these brilliant lawyers we have

Bankruptcy FAQ:

Bankruptcy FAQ
Bankruptcy FAQ

Frequently Asked Questions: Table of Contents Who is permitted to file and maintain a chapter 7 case? Who should not file a Chapter 7 case? Is there anything that a person must do

Can Creditors Be Sued For Trying To Collect Debt After You File For Bankruptcy
Can Creditors Be Sued For Trying To Collect Debt After You File For Bankruptcy

The injunction is formally issued pursuant to 11 U.S.C. 362(a), commonly referred to as the Automatic Stay provision of the bankruptcy code, and it prohibits creditors from making further attempts to

Can Your Home Be Sold In Bankruptcy If You Don’t File Bankruptcy But Your Spouse Files Bankruptcy?
Can Your Home Be Sold In Bankruptcy If You Don’t File Bankruptcy But Your Spouse Files Bankruptcy?

In a recent case, In re Beck Mrs. Beck filed for bankruptcy protection but her husband did not. Together they owned a property which was valued at about $530,000.00. The property had actually been in

Can You Claim A Homestead Exemption In A Home You Do Not Live In?
Can You Claim A Homestead Exemption In A Home You Do Not Live In?

The Chapter 7 trustee objected to Mrs. Goulakos’s claim of exemption because she did not live in the house and because she was not the one who claimed the homestead exemption under Massachusetts

Free Case Evaluation

Convenient and Confidential

    Frequently Asked Questions

    Bankruptcy FAQ

    Bankruptcy FAQ

    Can You Keep Your House If You File For Chapter 7 Bankruptcy?

    Can You Keep Your House If You File For Chapter 7 Bankruptcy?

    Can Creditors Be Sued For Trying To Collect Debt After You File For Bankruptcy

    Can Creditors Be Sued For Trying To Collect Debt After You File For Bankruptcy

    Let Ghai Law Fight For You.

    We’re here to provide help when you need us. Fill out this form below and I’ll reach out to discuss your case.

      Ghai Law Firm
      Call for a free consultation:
      (770) 792-1000

      Office Location

      LAW OFFICES OF ROGER GHAI

      1301 SHILOH RD NW STE 430

      KENNESAW GA   30144

      Mon-Fri: 9AM - 6PM

      Important Links

      • About
      • Practice Areas
      • Areas We Serve
      • Contact

      Practice Areas

      Personal Injury Lawyer Bankruptcy Attorney

      Ghai Law Firm

      Cobb County, Marietta, Kennesaw, Acworth

      "The Attorney"

      Site Map
      © Copyright 2023 Law Offices of Roger Ghai
      • ABOUT
        • Testimonials
        • Join Us
      • Practice Areas
        • Personal Injury
          • Pedestrian Accident
          • Car Accidents
            • Speeding Accident
            • Drinking and Driving Accidents
            • Left Hand Turn Accident
            • Rear-End Collision
            • Reckless Driving Accident
            • Uber Accidents
            • Hit-and-Run Accidents
            • Texting and Driving Accident
              • Texting and Driving Under 18
          • Truck Accident
            • Lane Usage Accident
            • Traumatic Brain Injury
          • Product Liability
            • Defective Drugs
            • Defective Medical Device
          • Premises Liability
            • Slip and Fall Accidents
          • Wrongful Death
          • Dog Bite
        • Bankruptcy
          • Debt Relief
          • Credit Card Debt
          • Chapter 13 Bankruptcy
          • Chapter 7 Bankruptcy
          • Foreclosure Bankruptcy
          • Free Legal Case Review
          • Medical Bills Bankruptcy
          • Rebuild Your Credit
          • Wage Garnishments
      • Areas We Serve
        • Kennesaw Personal Injury Lawyer
          • Kennesaw Bankruptcy Lawyer
        • Acworth Personal Injury Lawyer
          • Acworth Bankruptcy Lawyer
        • Marietta Personal Injury Lawyer
          • Marietta Bankruptcy Lawyer
        • Smyrna Personal Injury Lawyer
      • FAQs
      • Blog
      • Videos
      • Contact