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

Filing Chapter 13 Bankruptcy in Washington can have an effect on any co-signers who have agreed to pay your debts if you are unable to do so. When you file for Chapter 13 Bankruptcy, your creditors may try to collect the debt from your co-signers, even though they are not filing for bankruptcy. This is because a Chapter 13 Bankruptcy only involves the filing of a repayment plan in order to pay back a portion of the debt over time. Any co-signers will be held responsible for the debt, even if it is only partially paid with the repayment plan. Additionally, if a creditor does seek repayment from a co-signer for a debt included in the Chapter 13 Bankruptcy, the co-signer cannot be sued for the entire amount of the debt. This is because the court has entered an automatic stay that prevents any type of collection activity for debts included in the filing. However, co-signers may still be held responsible for any accrued interest or late fees that have accumulated during the repayment period. Finally, a co-signer may also be able to discharge their own debt in a Chapter 13 Bankruptcy if they are also suffering from financial hardship. If a court finds that the co-signer has a reasonable belief that they were misled or deceived into signing the loan, they may be granted a discharge of their own debt. Overall, filing for Chapter 13 Bankruptcy can have a significant effect on any co-signers that you have. It is important to be aware of these potential impacts and to contact a knowledgeable bankruptcy attorney if you have any questions.

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

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