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What effect does bankruptcy have on a co-debtor or co-signer?

April 26, 2017Bankruptcy co-debtor co-signer

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What effect does bankruptcy have on a co-debtor or co-signer?

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A non-filing co-debtor remains liable just as before (i.e. they are not filing bankruptcy). However, a filing debtor may be able to protect the non-filing co-debtor by filing a chapter 13. In any event, a notation that the account was included in a bankruptcy will likely appear on the co-debtors credit report which may damage their credit standing. That is simply the risk one takes when signing a contract with a co-signer.