Bankruyptcy Lawyer, Columbia SC

What Happens to the Codebtor Who Cosigned My Loan?

In a chapter 13 case, the creditor cannot seek to collect against the codebtor during the pendency of the debtor’s bankruptcy case without first getting permission from the bankruptcy court. After the debt is discharged or the case is closed, the creditor can pursue collection against the codebtor, subject to any confirmed plan provisions. In a chapter 7 case or for business loans there is no codebtor stay, so the creditor can enforce the debt against the codebtor during the debtor’s bankruptcy.