Protecting Cosigners under Chapter 13

[ajaperk]

BUT - Codebtors are to be listed and yes, they are supposed to get a notification that you have filed bankruptcy. Schedule H lists codebtors.

Even if that loan is not affected by the chapter 13?

[justbroke]

BUT - Codebtors are to be listed and yes, they are supposed to get a notification that you have filed bankruptcy. Schedule H lists codebtors.

I have never seen a requirement to have Co-debtor's "noticed" or "served" by placing them on the Matrix. I could see where you were "surrendering" the collateral that you would need to provide "notice" and serve the intentions on the co-debtor.

Keep in mind, I haven't had to deal with this personally, so I'm just not sure.

[sunshineMN]

Co-signers are supposed to be listed!!! In my case, my dad co-signed on a student loan on which my husband is the primary debt holder. We had to include my dad on our list of creditors/co-signers. And, yes, my father did get a notice once we filed.

We were upfront with him and told him about what was going on before we filed though. That was one of the hardest things I've ever had to do! But, filing is the best decision we've made...financially anyway!

We've never been late on the student loan payments, and it will continued to be paid (on time every month) outside of our plan.

[ajaperk]

Thank you everyone. I guess this answers my question.

[GG1981]

I don't know if it's a California thing, but attorney said that all my loans and debt had to be included in my Chapter 13. My debt is mostly unsecured and a car loan. Are you able to pick and choose what debt goes into the 13?

My car loan creditor GMAC, sent out a letter to me and my cosigner of the car loan and it stated that they were going to report negative info on both of our credit reports. My credit, I don't care. It's already ruin. It's my sister's/cosigner credit that I care about. All payments of the car loan had always been on time. The reason I stop making payments was because I filed couple days prior to that month's payment due date. My attorney told me to not make anymore payments.

In all I tried not adding BOA credit card and GMAC car loan. Both loans where I had a cosigner. It ticks me off that my cosigners credit will get ruin as well. GMAC is going to get paid in full and BOA will get partial back. After the end of the Chapter 13, it seems like could go after my co-signer for the remaining portion.

Ahhh, the frustration.

[justbroke]

No, you can't pick and choose which debt goes into a Chapter 13 or a Chapter 7. All debt must be listed. Your co-signatory's credit is not ruined if the co-signatory continues to make the payments, or you keep up with the payments and don't miss any.

If there is anything left over at the end of the Chapter 13 that was not paid, but was discharged as to you personally... sure they can and will go after the co-signatory. That's the whole purpose of the co-signor. Some other neck to choke if they can't get the primary signatory to pay!

This is why you never co-sign for anyone. Not even friends, and especially not family... if you love them.