How Do Debt Discharges Affect Co-signed Debts?
When a person co-signs on a debt, they promise to share their responsibility for that loan with one or more people. However, this shared liability can become burdensome if one of those co-signers files for bankruptcy. This problem typically arises because a debt discharge that is granted to a debtor during bankruptcy will generally only cancel the bankrupt debtor’s liability for the loan, leaving everyone else on to the loan still responsible for the remainder of the debt.
When you are or someone you share a loan with is considering bankruptcy, all factors affecting the situation must be considered. In order to fully understand how bankruptcy will affect you and potentially grant you financial relief, contact a Joliet bankruptcy lawyer at the Law Offices of Stuart B. Handelman, P.C., today at 815-722-2201.
Co-signed Debts Changed by Bankruptcy
The liability for co-signed debts changes once a debt discharge is granted, but the value of the debt is not actually affected. The co-signers with their names still on the loan will take over the remainder of the debt. Some of the most common types of co-signed loans or debts that are important in bankruptcies include:
- Business debts shared between debtors
- Co-signed home loans
- Rent or lease signings co-signed by another individual
- Co-signed auto loans
Bankruptcy is a very viable debt relief option for many people; however, it can be complex and affects people in unique ways. For this reason, it is always in a person’s best interest to consult with a bankruptcy attorney prior to filing for bankruptcy.
If you are overwhelmed by debt, we may be able to assist you in the process of filing for bankruptcy. To learn more about how to prepare for bankruptcy, contact a Joliet bankruptcy attorney at the Law Offices of Stuart B. Handelman, P.C., by calling 815-722-2201 today.