QUESTION
My wife co-signed for her mother on a bank credit card. Now married, my mother is filing bankruptcy. Will my wife be paying?
Asked on May 02nd, 2012 on Bankruptcy - New York
More details to this question:
My wife cosigned as a secondary for her mother when her parents got divorced. So she could use the card to pay bills for the family. ($2000 balance at the time of mother in laws new marriage). Bill has ballooned to $6700 and they are now filing for bankruptcy. Will they come after my wife? Is there anything we can do?
18 ANSWERS
Bankruptcy Attorney serving Jacksonville, FL
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Robert L. Peters, Attorney
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Since your wife co-signed and she is not filing for bankruptcy the answer is yes. She would still be obligated to repay the debt. If your wife's relatives receive a bankruptcy discharge they will no longer be obligated but that does not relieve your wife from her obligations to repay the debt.
Answered on Jun 06th, 2012 at 9:14 PM
Burton J. Green
Yes, creditor will still hold your wife accountable for the charges. If sued, your wife might try to defend that she did not make the charges. However, if your wife co-signed the application she would remain liable on the account. You need to review the application contract to determine exactly what your wife's liability is under the contract. Of course, even though she will be discharged from the debt, your wife's mother can still repay this account or at least make the monthly statement payments. Good luck.
Answered on May 11th, 2012 at 12:03 PM
Bankruptcy Attorney serving Concord, CA
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William Rubendall Attorney at Law
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A co-signer is obligated for the full debt if the primary borrower defaults. You might want to try to make a settlement or a payment plan with the creditor.
Answered on May 09th, 2012 at 2:09 PM
Adoptions Attorney serving Middletown, RI
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Joseph F. Hook Attorney at Law
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If your wife's mother files for chapter 7 the creditor will be able to come after your wife as a co-signer on the loan. If your wife's mother files chapter 13 and has an approved plan, the creditor will not be able to come after your wife during the duration of the plan, unless it files an application with the court and obtains an order of relief from the co-debtor stay.
Answered on May 09th, 2012 at 1:46 PM
Business Bankruptcy Attorney serving Raleigh, NC
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J.M. Cook, P.A.
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As co-maker or guarantee, your wife is personally liable for the debt. If the other party has filed for bankruptcy, the credit card company will most certainly come after your wife for the balance.
Answered on May 09th, 2012 at 1:45 PM
Glen Edward Ashman
Your wife has found out why one NEVER cosigns a debt. Yes they will come after her and yes she must pay it.
Answered on May 09th, 2012 at 1:39 PM
Bankruptcy Attorney serving Seattle, WA
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The Law Office of Marc S. Stern
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The bank certainly thinks so. In fact, in Washington, a gift of community credit requires the consent of both spouses so there is a good defense if they sue the community. If your wife has separate property, however, that is a totally different matter.
Answered on May 09th, 2012 at 1:19 PM
Yes. But I read it as "her mother is filing for bk." So your wife is responsible and that includes her husband. I recommend a negotiated settlement. Pay it off at a discount.
Answered on May 09th, 2012 at 1:16 PM
Immigration Attorney serving Arlington, TX
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Law Office of Pho Ethan Tran, PLLC
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If your wife was a cosigner or co-debtor on the debt, she will remain liable on the account even after her mother is granted a discharge by the bankruptcy court. She should contact the bank and work out a lump sum settlement or establish a payment plan. She can also petition for bankruptcy herself if needed.
Answered on May 09th, 2012 at 1:12 PM
Yes, most likely they will come after the cosigner. Cosigner now has to decide, if eligible, to file either for a Chapter 7 bankruptcy to do a Chapter 13 bill repayment plan.
Answered on May 09th, 2012 at 1:09 PM
The bankruptcy of your mother in law will not affect your wife in any way. She signed the promise to pay any charges on the card. So, she will still owe.
Answered on May 09th, 2012 at 1:07 PM
Commercial Bankruptcy Attorney serving Davie, FL
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Law Office of Jeffrey Solomon
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If the card is co-signed instead of just as an authorized user, than your wife does owe the full balance on the credit card.
Answered on May 09th, 2012 at 1:07 PM
Chapter 7 Bankruptcy Attorney serving Milwaukee, WI
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Law Offices of Deborah A. Stencel
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Your mother-in-law can elect to continue payments on this debt to protect her co-signer. If she does not, your wife will need to pay this debt or she may face collection action from the creditor.
Answered on May 09th, 2012 at 1:02 PM
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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Most probably the bank will come after your wife. Call, and confirm in writing, that you wish to withdraw from any father guarantees. They will most probably cut off the credit card. That should stop the loss. Then you can go to the bank and seek to cut a deal. Generally your wife is liable for the full amount legally although there may be exceptions, see a lawyer.
Answered on May 09th, 2012 at 1:02 PM
Criminal Defense Attorney serving Deltona, FL
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R. Jason de Groot, P.A.
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The co-signer is just as responsible as the signer. They probably will come after your wife. What you can do about it is ask for verification of the debt. Perhaps if they sue you could do what is known as a notice of production, asking for all of the individual receipts for credit card purchases. Most companies use to have central clearing houses where the receipts go. Who knows where they go now in this digital age. They may have to produce these things for trial. You will need to hire an attorney in order to do this right. Good luck.
Answered on May 09th, 2012 at 1:01 PM
Bankruptcy Chapter 7 Attorney serving San Diego, CA
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Law Office of Asaph Abrams
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A limited codebtor-stay applies in chapter 13, if applicable; however, ultimately a codebtor is a codebtor and bankruptcy doesn't discharge the nonfiling-codebtor's obligation. In a chapter-7-bankruptcy context, Mom is free to voluntarily pay back that debt after filing the chapter 7 bankruptcy, notwithstanding its presumed discharge in the bankruptcy. Otherwise consider your wife's assumption of the debt to be an unintended $6,700 wedding gift to mother-in-law.
Answered on May 09th, 2012 at 12:59 PM
Bankruptcy Chapter 7 Attorney serving Los Angeles, CA
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Bereliani Law Firm, PC
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As a cosigner your wife is responsible for debts not paid by the original card signer, that is the meaning of co-signer. You can attempt to take your wife's name off as co-signer but I doubt the credit card company will allow this as that was a condition of granting the card. Once your mother in law files for bankruptcy they cannot collect the debt from her and will next pursue to collect the funds from your wife. You can choose to pay them off through a lump sum settlement or continue regular payments. If you have other debts yourselves, you can file for bankruptcy. It all depends on your situation. I'd recommend consulting an attorney.
Answered on May 09th, 2012 at 12:53 PM
Bankruptcy & Debt Attorney serving Syracuse, NY
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Theodore Lyons Araujo
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If your wife co-signed she is liable for the debts. The person filing bankruptcy extinguishes their liability, but the person who has liability who did not file bankruptcy retains that liability.
Answered on May 09th, 2012 at 12:52 PM