Many debtors filing for Chapter 7 or Chapter 13 bankruptcy hold debt that has a co-signer. Although this type of debt can and should be included in a bankruptcy filing, it will not protect the co-signer from being pursued by creditors. When someone co-signs on a debt, they are basically saying that they will repay the debt if the main person on the loan defaults or somehow does not fulfill their terms of the debt. For example: If you took out a car loan and had your mother co-sign the car loan, she would become responsible if you didn’t pay. Whether you have a co-signer (or not) does not impact in any way your ability to file for bankruptcy; but it does not relieve the co-signer of their responsibility to repay the debt.
Don’t let having a co-signer on a car loan, mortgage etc. deter you from filing for bankruptcy. You can always reaffirm the debt and continue to make payments after the bankruptcy. Or, you can work with your co-signer to pay on their behalf after your bankruptcy has been discharged. It’s important to remember, that once your debt as been discharged you have no legal obligation to repay the debt; but you can voluntarily do so without penalty.
