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How does bankruptcy affect my obligation as a co-signer?

How does bankruptcy affect my obligation as a co-signer?

Q: Is a co-signer responsible for debt?

Yes, a co-signer is legally responsible for the debt. If the primary borrower defaults or files for bankruptcy, the co-signer must fulfill the payment obligations, regardless of the borrower's situation.

Q: What happens if you cosign a loan and the other person defaults?

If you cosign a loan and the primary borrower defaults, you are responsible for repaying the debt. The lender can pursue you for payment, which may impact your credit score.

Q: Are you not responsible for the debt if you are a cosigner on a loan?

As a co-signer, you are responsible for the debt. This obligation remains even if the primary borrower fails to pay or files for bankruptcy. You must be prepared to cover the payments if necessary.

Full question:

If I am a co-signer for a debt, how does bankruptcy affect the obligation?

Category: Bankruptcy
Date: 04/07/2025
State: Alabama

Answer:

If the original borrower files for bankruptcy, the co-signer remains responsible for the debt. The co-signer's obligation does not change, even if the borrower receives a discharge of the debt.

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

What happens if you file bankruptcy and have a cosigner?

If you file for bankruptcy, your co-signer remains responsible for the debt. Your bankruptcy discharge does not relieve the co-signer of their obligation, and they may need to continue making payments if the loan is not settled.