Debt doesn’t just consume one person at a time, in the event there is
a co-debtor, (and several of your debts include co-debtors). Also known
as co-signors, the people who sign with you on a debt are often family
members and the closest friends you have.
By signing a
legal document guaranteeing that your debt would be paid, the co-debtor
is now in a precarious situation as you file for bankruptcy.
If
your goal is to wipe out as much of your debt as possible, as quickly
as possible, Chapter 7 would be a good choice. However, under Chapter 7,
co-debtors are not protected. If you receive a Chapter 7 discharge, you
would no longer have any legal responsibility to repay the debt that
was also signed by your co-debtor. But creditors would then be able to
collect from the co-debtor.
The only way to protect a
co-debtor is to file a Chapter 13 repayment plan, although that
virtually guarantees a 60-month schedule to pay your disposable income,
after necessary expenses, to your creditors.
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