How does filing Chapter 13 Bankruptcy affect my co-signers?

Filing for Chapter 13 Bankruptcy in South Carolina can affect your co-signers, especially if they live in the state. A co-signer is someone who agrees to be legally responsible for your debt if you fail to pay it. If you file for Chapter 13 Bankruptcy, all debts listed on the bankruptcy are wiped out, so your co-signers are no longer responsible for that debt. However, the court can still issue an order allowing creditors to collect the debt from your co-signer, even though they were not part of the bankruptcy. This is called a Reaffirmation Agreement, and creditors are only allowed to pursue it if they can prove that your co-signer had a significant financial interest in the debt. Therefore, if you file for Chapter 13 Bankruptcy, your creditors may still try to collect the debt from your co-signer. Additionally, the bankruptcy filing and any judgement against your co-signer can have a negative effect on their credit. This can cause your co-signer to have difficulty obtaining credit in the future. Therefore, it is important to consult with your co-signer before filing for bankruptcy to discuss the potential implications it may have on their credit and to ensure they are fully aware of the risks associated with being a co-signer.

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How does filing Chapter 13 Bankruptcy affect my co-signers?

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