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

When someone in Virginia files for bankruptcy, their co-signers will likely be affected. While there are some types of bankruptcy that may not affect co-signers, the most common type, Chapter 7 bankruptcy, will. In a Chapter 7 bankruptcy, a debtor’s co-signers are often responsible for paying off the debt. The co-signers may be able to reach an agreement with creditors in which they make the payments instead of the debtor. However, if the co-signers are unable to make the payments, the creditor may take legal action against them to collect the debt. If the co-signers are unable to pay the debt in a Chapter 7 bankruptcy, the creditor may sue them and try to get a judgment. A judgment is a court order asking the co-signers to pay the debt.If the creditor is successful, they can use various techniques to collect the debt, such as garnishing wages or seizing assets. In some cases, a co-signer can file for bankruptcy individually. This is known as a “co-debtor stay.” If a co-debtor stay is filed, the creditors must stop any collection actions and wait until the bankruptcy is complete before taking any further action. Ultimately, if someone in Virginia files for bankruptcy, it is important to consider the effects on any co-signers before filing. While filing for bankruptcy may protect the debtor from the burden of their debt, it can put a significant amount of strain on the co-signers. It is important to discuss the risks with co-signers before making any decisions about filing for bankruptcy.

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

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