Co-Signer's credit report

[cubfan300]

My brother-in-law and I had a joint account that was owed about 12k when I filed. As all of this debt was incurred by me, I included it into my list of claims when I filed in July 2006. He checked his credit report recently and in July 2007 it is showing that the debt was written off and it is negatively affecting his credit rating. He knows that it wasn't there before July 2007 because he bought a home in June 2007 and there was no mention of it in any of the credit bureaus.

I thought that co-signers were protected during this process? What do I need to ask my attorney to get this taken care of? I am in a 100% secured, 0% unsecured plan.

[magyar123]

It was you only who filed and and presuambly discharged. Not him. Co-signers are only protected, just like you, during the 60 day period following the date of your filing. Since it was only you who filed he's now fair game for the collection goons to go after him.

[cubfan300]

If I listed in my claims and they chose not to file a claim, how could they decide to "go after" him? Plus it shows as written off, not in collection.

[chpxiii]

A co-signer is assuming responsibility for a loan if the original signer of the loan defaults on that loan. This is why many creditors want a co-signer for some borrowers. They may be taking a chance on the borrower, but they want to protect themselves a little further by having another means and avenue to go after debt owed.

By co-signing your loan, your brother in law assumed responsibility for the loan should you default. If you default, the creditor then goes to the next person on the list of people who are responsible for the loan. And right now, foryour loan, that is your brother in law. Filing bankruptcy and not paying off a debt is, in essence, defaulting on a loan. Therefore, what you do will affect your brother in law.

Doing a quick search for "cosigner responsibility" resulted in this document:

http://www.indianajustice.org/Data/DocumentLibrary/Documents/1053371675.11/0105co-signer.pdf

[woeisme]

You are paying back 0% to unsecured. They probably checked out your payment proposal (your filing is public record) and figured "why bother?" The only way he is protected if a co-signer is if you were in 100% payback to unsecured. Even if you paid off 99% in your plan to unsecured, they would discharge you from the remaining 1% at the end of your plan but still be able to go after him for the other 1%. They charged it off, which means they may not go after him for the debt (although they could have also sold it to someone else, written it off their books and now a different credit collector may come after your co-signer at some later point to collect.) But either way, it is going to be a negative on his credit. He co-signed for the debt, which means he promised to pay for it if you did not or could not. The debt was not paid. He did not hold up his promise to the creditor to pay if you did not, so is no longer as credit-worthy as he was before, it's just that simple.