The Impact of Bankruptcy On Co-Debtors

Leave a Comment

Bankruptcy can have a big impact on a co-debtor or co-signer. This makes it crucial to understand how bankruptcy works from the beginning in order to avoid surprises down the road.

It is crucial for co-debtors and co-signers to understand how bankruptcy works from the beginning.


A common confusion pertaining to bankruptcy is the co-debtor’s liability to pay off debt.  It’s important for a co-debtor or co-signer to know that even if the person who has filed for bankruptcy is relieved of paying their debts, the co-debtor is still liable.  Bankruptcy only nullifies the contract for the person who filed, their co-debtor is still bound to the contract. This means they will be required to continue payments on any co-signed debt after bankruptcy filing. This is necessary in order to maintain a positive credit report.

It’s also important to know the filer has the option to voluntarily repay any debt after bankruptcy. They are not required to do so but the option is available.


Another important element pertaining to bankruptcy’s impact on co-debtors is their credit. This is especially important for a married couple. A common misunderstanding regarding credit is once a couple gets married their credit combines.  This however is not true. Each person has their own credit and it’s important to establish that from the beginning.

If you are facing financial hardships, it’s best to file for bankruptcy before you get married.  This enables you to start your marriage with a clean slate and without any financial burdens.  Additionally, if you get a divorce you are able to move on more easily with regards to your finances.


A co-debtor’s protection under bankruptcy depends on the type of bankruptcy that is filed.  If a Chapter 7 bankruptcy is filed, the co-debtor must repay the debt. However, if a Chapter 13 bankruptcy is filed and the filer follows the plan accordingly, the co-debtor is protected under “co-debtor” stay.

Ultimately it’s important to set up a free consultation with The Debt Doctors to further understand the impacts bankruptcy will have on an individual’s finances. Additionally, speaking to an attorney will better prepare a co-debtor with the necessary steps to take after filing for bankruptcy.

Share This Post

Leave a Reply

Your email address will not be published. Required fields are marked *

The Debt Doctors

607 College Street, Suite 101
Pittsburgh, PA 15232

© 2019 Debt Doctors. All rights reserved.