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Does Filing Bankruptcy Affect a Co-Signer’s Credit?

Posted on Thursday, March 20th, 2014 at 5:39 pm    

Many people who file bankruptcy in Northern Kentucky have co-signers on their debt. For some, the co-signer is part of the reason they are filing bankruptcy in the first place! I cannot count the number of parents I have met who have had to file bankruptcy because they were sued when a child defaulted on car payments. Similarly, I have helped quite a few people file bankruptcy because an ex-spouse defaulted on the mortgage that both spouses signed before the divorce.

Trying Not to Hurt a Family Member’s Credit

Sometimes the reverse of that situation is also true. I’ve seen quite a few people fall on hard times with their debts generally, but faithfully keep a particular debt paid because they know a family member co-signed on that debt. The last thing anyone wants is for a family member’s credit to be hurt, especially if that family member has nothing to do with the default on that debt. In this situation, the question I’m most commonly asked is, “If I file bankruptcy on this debt, will it hurt my co-signer’s credit?”

Bankruptcy is Tied to Specific Social Security Numbers

The answer is straightforward, but there are a few factors that need to be considered before you arrive at a plan to deal with the debt. In short, if you file bankruptcy, your social security number is the one the bankruptcy attaches to. A co-signer’s social security number will not be involved, and thus the bankruptcy does not go on their credit. At most, the co-signer’s credit report will receive a notation, on the particular debt in question, that a bankruptcy was filed on that debt. This should not affect the co-signer’s credit score.

Can Creditors Come After Co-Signers After Kentucky Bankruptcy Proceedings Are Started?

The bigger and more important issue is the matter of whether the creditor can sue or demand payment from the co-signer. If the co-signer has not filed a bankruptcy of his or her own, then the co-signer might be forced to pay the debt. This can be avoided if you continue to pay on the debt, and there are several ways that this can be accomplished, including by filing a reaffirmation or by paying the debt through a Chapter 13 payment plan.

Protecting co-signers during a bankruptcy is one of the many reasons that Northern Kentucky bankruptcy filers need the services of a skilled bankruptcy attorney.

If you or someone you know may need to file bankruptcy, contact a Northern Kentucky Bankruptcy Lawyer today. Lawrence & Associates can help!

Contact Us (859.371.5997) for a Free Consultation


What is a Chapter 13 Bankruptcy?

Posted on Thursday, March 13th, 2014 at 8:56 am    

Chapter 13 BankruptcyChapter 13 is a type of bankruptcy that allows consumers who are struggling with debt to seek relief through the court. Chapter 13 is commonly used by people who are facing home foreclosure, as it can stop that process in its tracks. A debtor must meet Chapter 13 requirements to file for bankruptcy under this chapter. Unlike a Chapter 7 bankruptcy, which allows the debtor to discharge some debts in exchange for the sale of nonexempt property to pay creditors, Chapter 13 allows the debtor to keep their property and repay creditors in a three or five year court-approved repayment plan.

If you’re struggling to pay your bills each month, filing for bankruptcy under Chapter 13 may allow to you get back on track by reorganizing your debts into one affordable monthly payment; however, there are certain requirements that must absolutely be met in order to file for a Chapter 13 bankruptcy. A Kenton County, Kentucky bankruptcy attorney can determine if you are eligible for a Chapter 13.

If you don’t qualify to permanently discharge debt under Chapter 7 or prefer to set up a new payment plan with your creditors, Lawrence & Associates will help you reorganize your debt in a Chapter 13 bankruptcy filing. We will prepare and file all the necessary paperwork to complete the process and will represent you in hearings or meetings with creditors, the bankruptcy trustee or the bankruptcy court. We will help you put together a reorganization plan and will review all proposed repayment plans to ensure they are appropriate.

If you or someone you know needs to file a Chapter 13 bankruptcy, contact a Northern Kentucky Bankruptcy Attorney today. Lawrence & Associates can help!

Contact Us (859.371.5997) for a Free Consultation

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