Cosigners and Bankruptcy

Augusta GA Bankrutcy Lawyer

Cosigners are individuals who sign loan documents in conjunction with the primary borrower. If, you file Chapter 7 bankruptcy, the creditor can proceed against your co-signers, according to the terms of the debt agreement. However, if you file a Chapter 13 debt adjustment, a co-signer is protected if the following conditions are met:

• The debt must be a consumer debt
• also, the debt may not be incurred in the ordinary course of business,
• and the co-signer cannot benefit from the proceeds of the debt
• as long as the debtor is making the required payments under the Chapter 13 plan, the creditor cannot act to collect from the co-signer. The purpose of this provision of Chapter 13 is to allow a debtor to repay the debt without the creditor approaching the co-signer for repayment.

This is to say that if you file a Chapter 7 bankruptcy, your creditors have the right to immediately demand payment from your cosigners. If, on the other hand, you file a bankruptcy petition and a proposed payment plan under Chapter 13, your creditors cannot collect from your co-signers unless it becomes clear that the Chapter 13 plan will not pay the entire amount owed.

We are bankruptcy attorneys based in Augusta, GA (Georgia). We serve clients in Augusta, GA (Georgia) and throughout the CSRA, including Columbia County, Richmond County, Lincoln County, McDuffie, Jefferson and Burke Counties, Evans, Appling, Waynesboro, Louisville, Thomson, Lincolnton, Girard Georgia & Aiken, South Carolina & North Augusta SC. Contact us. We can help you file for bankruptcy.