How can I protect co-signers from being affected by my bankruptcy?

One way you can protect your co-signers from being affected by your bankruptcy is by reaffirming or redeeming certain debts. Reaffirming means that you and your co-signer agree to be responsible for the debt, and that you will make payments on the debt. Redeeming means that you pay one lump sum payment to the creditor to satisfy the debt. Both of these options require you to have the financial means to make these payments. Another way to protect your co-signers is by filing for Chapter 13 bankruptcy. In a Chapter 13 bankruptcy, you can create a repayment plan to pay off your debts over a three to five-year period. Your co-signer would not be liable for any of these payments, although they may be required to be listed in the repayment plan. Finally, you can ask the creditor if they are willing to release your co-signer from the debt. This is often referred to as a “courtesy release” and will require the creditor to agree to do so voluntarily. However, creditors are under no obligation to do so and it really depends on the creditor’s willingness to negotiate. If you are facing bankruptcy in North Carolina, speak to an attorney or credit counselor to explore your options. It is important to take steps to protect your co-signers from the effects of your bankruptcy.

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How can I protect co-signers from being affected by my bankruptcy?

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