QUESTION
If I am a co-signer of a loan note and I am filing bankruptcy, can I discharge the primary signer of the note if I intend to keep the note?
Asked on Feb 13th, 2013 on Bankruptcy - North Carolina
17 ANSWERS
You can list the debt in your bankruptcy. You can ask the Judge to reaffirm the debt. I don?t know what you mean by discharging the primary signer.
Answered on Apr 01st, 2013 at 2:58 AM
Bankruptcy Attorney serving Seattle, WA
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The Law Office of Marc S. Stern
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No.
Answered on Mar 11th, 2013 at 2:18 PM
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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No, the primary signer will remain liable.
Answered on Mar 05th, 2013 at 10:29 AM
Estate Planning Attorney serving Wilmington, DE
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Reger Rizzo & Darnall, LLP
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No, only the lender can do that and it is not in their best interests to release someone from responsibility. As long as you keep paying it there shouldn't be a problem against the co-signor.
Answered on Feb 20th, 2013 at 2:25 PM
Based on the information provided there is no way to discharge the co-signer unless you qualifiry for a loan on your own without the co-signer needed. You may want to contact your lender to see if this is an option for you. At this point the only one that can make this determination would be them. Remember the reason why lenders request a co-signer is so they have two people instead of one to get their money back from should the need arise.
Answered on Feb 20th, 2013 at 2:25 PM
Bankruptcy Attorney serving Phoenix, AZ
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Law Office of D. L. Drain, P.A.
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Bankruptcy is a very complicated process. It is wise to talk to an experienced bankruptcy attorney before deciding to take this important step.
Answered on Feb 20th, 2013 at 2:25 PM
Bankruptcy Law Attorney serving Austin, TX
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Law Office of Susan G. Taylor
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If I'm understanding you correctly, the answer is NO. Co-signer obligations would go through your chapter 7 bankruptcy unaffected.
Answered on Feb 19th, 2013 at 10:33 PM
Construction Litigation Attorney serving Mission Viejo, CA
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Law Office of Christian F. Paul
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No. Your obligation to pay the note may be discharged, meaning you won't be responsible for it any longer, but unless your co-signer also files a bankruptcy petition, he or she will not be affected, and will have to pay the note or risk being sued. When you say, "I intend to keep the note," its not clear what you mean. If you mean that you want to continue to be responsible for paying the note, then you can either reaffirm the note in your bankruptcy and continue to be obligated on the note, or you can let it go to discharge but still make payments. Nothing prevents the debtor from paying his or her debts after they have been discharged. I once had a debtor pay of his debt to me after his bankruptcy was discharged, a nice surprise, but something he felt he wanted to do. Hope this helps.
Answered on Feb 19th, 2013 at 12:52 PM
No. The primary signer too must file Chapter 7 in order to be Discharged.
Answered on Feb 19th, 2013 at 12:51 PM
Bankruptcy Attorney serving Livonia, MI
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Charles J. Schneider, P.C.
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No. It's your bankruptcy not his or hers.
Answered on Feb 19th, 2013 at 12:50 PM
In a bankruptcy, you cannot discharge the debts of someone else. You may continue to pay the note but the co-borrower will continue to be 100% legally responsible for the debt.
Answered on Feb 19th, 2013 at 12:50 PM
Bankruptcy Attorney serving Overland Park, KS
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Wellman Law LLC
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You can prevent the creditor from pursuing the co-signer by continuing to pay the debt on time during and after a Chapter 7 case. The debt can also be paid in a Chapter 13 plan as a special class claim to protect the cosigner. Both of these options prevent the creditor from pursuing the cosigner. It does not discharge their liability, but it prevents collection efforts.
Answered on Feb 19th, 2013 at 12:49 PM
Deborah F. Bowinski
You can discharge your own personal liability for the note (assuming it is not a student loan), but filing a bankruptcy case for yourself cannot have any effect on the other borrower's obligation to pay. As long as you keep payments current the other borrower would be protected from the creditor, but if you do not pay then the lender can still look to the other person for payment.
Answered on Feb 19th, 2013 at 12:49 PM
Bankruptcy Law Attorney serving Livingston, NJ
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Law Office of Stuart M. Nachbar, P.C.
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No, they can not be discharged by your filing.
Answered on Feb 19th, 2013 at 12:49 PM
General Practice Attorney serving Crystal Lake, IL
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Bruning & Associates, P.C.
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Eliminating liability for the notes co-signer would require one of two things to happen. In one scenario, both of you would need to file bankruptcy, and through a process in the bankruptcy court called reaffirmation, you could keep the note. If that is not possible, you could theoretically negotiate something with the bank. Because banks are reluctant to engage in non-standard credit transactions with risky borrowers, the second option is not very realistic.
Answered on Feb 19th, 2013 at 12:46 PM
No matter what you do in bankruptcy, the note holder will remain liable for the debt (assuming they are not filing with you). You cannot discharge someone else from a debt in your bankruptcy.
Answered on Feb 19th, 2013 at 12:46 PM
Chapter 13 Bankruptcy Attorney serving Winston-Salem, NC
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Love and Dillenbeck Law
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Your Bankruptcy filing will not affect the rights of another person. If you pay off the loan then no money is owed. But if you discharge the loan or otherwise dont pay it in full then the other signor is still liable.
Answered on Feb 19th, 2013 at 12:45 PM