Chapter 7 Discharge and Co-Signer Liability

August 1, 2019 | By Steffens Law Office
Chapter 7 Discharge and Co-Signer Liability

If you have joint debts or loans that involve a co-signer, it's important to consider how bankruptcy will affect these obligations.

A Chapter 7 discharge releases only the person or persons who filed the Chapter 7 case. The liability of any other party on a debt is not affected by a Chapter 7 discharge. Therefore, a person who has cosigned or guaranteed a debt for the person filing is still liable for the debt even if the person filing receives a Chapter 7 discharge with respect to the debt.

If you are married and have joint debt with your spouse, it's often best to file a Chapter 7 case as a couple. Otherwise, the spouse who doesn't file will become liable for the debt regardless of their income or assets. 

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