What happens to my co-signed debts when filing for Chapter 7 Bankruptcy?

When filing for Chapter 7 Bankruptcy in Iowa, the debts that have been co-signed will be included in the filing. This means that creditors can demand that both the original debtor and the co-signer make payments on the debt. However, if the co-signer chooses to make payments on the debt, the original debtor may remain protected from the debt. By including the co-signed debt in the filing, the debtor can also discharge the debt. This means that both the original debtor and the co-signer are no longer responsible for the payment of the debt. This will allow the debtor a way to clear the debt without having to repay it. Creditors may also take the co-signer to court for collection of the debt, but will not have to sue the original debtor. This means that the co-signer may be responsible for the repayment of the debt, even if the original debtor is not. In some cases, the court may also allow the debtor and the co-signer to agree to a repayment plan. This will require the co-signer to make payments on the debt until it is repaid, but without the protection of the bankruptcy filing. It is important for the debtor to understand that the inclusion of co-signed debt in the bankruptcy filing has the potential to affect the credit of the co-signer. Depending upon the debt and the terms of the loan, it may be beneficial for the original debtor to make payment arrangements with the co-signer in order to protect their credit.

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What happens to my co-signed debts when filing for Chapter 7 Bankruptcy?

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