Co-signer on Sister's Home

[serioso]

I am listed as a co-signer on my sister's home. She has never missed a payment, carries insurance to cover the mortgage in case of death or disability, I am designated as one of her beneficiaries in her living trust, etc. So, I feel very secure that this will not come back to bite me in the a$$.

Question, am I obligated to list and/or re-affirm this debt? What will/could happen if I don't? I'd rather not list it since I don't want my sister/family to know about my bankruptcy.

Best regards,

Serioso

[sunshine08]

Good question. Are you a co-owner in the residence??? Is your name on the title or just the loan??

[serioso]

My name is not on title, just on the loan.

[StaciMM]

You are obligated to list the debt, but not to reaffirm. Now, if she defaults they can come to you. After the BK, they can't.


PS-It won't change her loan terms, etc. but will just make her solely responsible.

[serioso]

Thanks Staci, not what I want to hear but I appreciate the response.

Now for the sake of argument, if I don't list the debt, how does the trustee know? Do they check credit reports?

[StaciMM]

If you don't list it, then most likely the original agreement will stand. Which means if next year, your sister loses her job or has some other financial calamity and ends up in foreclosure, you will be stuck with the bill also, show a foreclosure on your credit, etc. And, since you won't be able to file another ch. 7 for 8 years (or ch. 13 for 4) that is not a good chance to take. (Negative credit after BK is like a kiss of death.)

I'm sure you have your reasons, but I can't imagine why you would want to obligate yourself to a loan for a house you don't have ownership to after BK.