What will happen to my co-signers if I file for bankruptcy?

If you file for bankruptcy in Texas, your co-signers may be affected in a few ways. Depending on the type of bankruptcy you file, the co-signers may have to pay the debt that you owe. If the co-signer is a spouse, any debts that you have taken out together may be split in a certain way. If a Chapter 7 bankruptcy is filed, the co-signers responsibility for the debt is removed, because all non-exempt assets are liquidated to pay creditors, and any remaining debt is released. However, if you file a Chapter 13 bankruptcy, the co-signers responsibility may remain, as the debt must be paid in full, or through a repayment plan. It is important to note that when filing for bankruptcy, the co-signers name must still appear on documents, as the debt is not completely forgiven. Furthermore, filing for bankruptcy can still have a negative effect on the co-signers credit, even if their name is not involved in the actual bankruptcy filing. In conclusion, a bankruptcy filing does not usually absolve the co-signers of responsibility for the debt. Depending on the type of bankruptcy, it may still remain, and the co-signers credit may be affected. It is best to check with a lawyer who is knowledgeable in bankruptcy law, before filing, to ensure that the co-signers will not be negatively impacted.

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What will happen to my co-signers if I file for bankruptcy?

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