How does Chapter 13 Bankruptcy affect my co-debtors?

In Washington, Chapter 13 Bankruptcy affects co-debtors in various ways. When someone files for Chapter 13 Bankruptcy, they must provide the court with a repayment plan of how they plan to pay back their creditors over a period of three to five years. During this period, the filer’s co-debtors are also responsible for making payments to the creditor. The co-debtors for the bankrupt person’s debts are required to meet the terms outlined in the court-ordered repayment plan. This means that the co-debtor must make a monthly payment to the creditor in line with what the U.S. Bankruptcy Court requires. If the co-debtor cannot adhere to the repayment plan, they can be sued by the creditor. In some cases, the co-debtor may be able to negotiate a lower payment with the creditor if they agree to take responsibility for the debt. This could lower their risk of being sued by the creditor, but it is not guaranteed. In some situations, the creditor may even require the co-debtor to provide collateral in order to secure the repayment. It is important for co-debtors to understand that when someone files for Chapter 13 Bankruptcy, it does not always mean that the debt will be discharged or written off entirely. The co-debtor can still be held liable for debt payments that cannot be made by the bankrupt person.

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How does Chapter 13 Bankruptcy affect my co-debtors?

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