How does co-debtor stay work in Chapter 13 Bankruptcy?

Co-debtor stay is a type of protection offered in Chapter 13 Bankruptcy. Co-debtor stay applies when a joint debt is acquired, meaning when two people are responsible for repayment of the debt. The co-debtor stay prevents the creditor from attempting to collect the debt from the co-debtor, even if the primary debtor (the person who initially acquired the debt) files for bankruptcy. In most cases, co-debtor stays are automatic and last until the bankruptcy case is discharged. This means that the creditor is barred from attempting to collect the debt from the co-debtor until the case is closed. In some cases, however, the co-debtor stay can be lifted if the creditor can prove that they would suffer hardship if the stay is not lifted. The court will then review the creditor’s claim and determine if the stay should be lifted. The co-debtor stay helps the primary debtor by preventing the creditor from attempting to collect the joint debt from the co-debtor while the debt is being restructured in the bankruptcy case. This can give both the primary debtor, and the co-debtor, more breathing room to pay off the debt and restructure their finances. Overall, the co-debtor stay in Chapter 13 Bankruptcy offers protection to co-debtors from creditors attempting to collect a joint debt from them. This can provide the debtor and co-debtor with more time and space to restructure their finances and pay off the debt.

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How does co-debtor stay work in Chapter 13 Bankruptcy?

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