What happens to joint debts in Chapter 13 Bankruptcy?

In Chapter 13 Bankruptcy, joint debts may be handled in a variety of ways depending on if the debt is joint or cosigned. Joint debts are debts taken out in two parties’ names. These debts are jointly liable, meaning that both people are obligated to repay the debt. Cosigned debts, however, are not joint debts and only the person who cosigned the debt is legally responsible for repayment. If a debt is joint, the debtor must include the joint debt in the bankruptcy filing and must include the amount owed and the name of the other debtor. The debtor’s plan must address how the joint debts will be paid, either in full or partially. If the debtor’s plan does not adequately provide for the payment of the joint debts, the bankruptcy court may refuse the plan, and the debtor must then propose an amended plan. The other debtor is not a party to the bankruptcy case but will benefit from the discharge because the debt is no longer legally enforceable against him or her. While the joint debt is included within the filing, it is not discharged. Therefore, the other debtor still has a responsibility to pay the joint debts after the case is completed. In conclusion, joint debts in Chapter 13 Bankruptcy must be addressed in the debtor’s plan. The other debtor will benefit from the discharge of the debt but still has an obligation to pay the joint debt.

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What happens to joint debts in Chapter 13 Bankruptcy?

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