How will Chapter 7 or 13 bankruptcy affect my co-signed loan?
How will Chapter 7 or 13 bankruptcy affect my co-signed loan? Assistant at Ascent Law LLC Assistant at Ascent Law LLC If you filed for Chapter 7 or Chapter 13 bankruptcy, you can still continue making monthly payments on your co-signed loan. However, if you fail to do so, your credit report will reflect "no payment" and/or collections. This is bad for both you and your co-signer, but there are steps you can take to protect your credit in the future. A co-signer helps the borrower by securing collateral, but if the borrower defaults on the loan, the creditor may pursue the co-signer's assets. Fortunately, the court can lift the stay if the co-signer has received a benefit from the loan. A bankruptcy can affect your co-signer's credit and personal liability. When a co-signer files for Chapter 7 or Chapter 13 bankruptcy, the creditor cannot collect on the debt. However, a bankruptcy will affect your co-signer's credit, which will impact your credit rating. When you f...