subject: Your Obligations as a Co-Signer on a Debt if You File Bankruptcy [print this page] Your Obligations as a Co-Signer on a Debt if You File Bankruptcy
Steve Westerfield, the owner of theSteve Westerfield Law Office in Hot Springs, AR, has 32 years of experience in legal practice as a sole practitioner. He has represented clients before 40 of the 75 Circuit Courts located within the State of Arkansas, before the Federal District Court in both the Eastern and Western District of Arkansas, and before the FederalBankruptcy Court in both the Eastern and Western District of Arkansas. Here, Westerfield talks about your obligations as a co-signer on a debt if you file bankruptcy.
Business Partners
Typically, bankruptcy will release a co-signer from obligation on a promissory note or contract. The other signer or co-borrower will then become solely responsible for the debt. The bankruptcy of one borrower will not protect the other borrower or co-signer. For instance, if business partners sign a promissory note in order to purchase an item of equipment, and one of them later files bankruptcy, then the person that files bankruptcy will be released from all of his obligations on the note.
However, the remaining party will still remainresponsible for the debt and will not be shielded by the bankruptcy of the other party. The remaining party either has to pay the obligation, or file for bankruptcy protection if he is unable to do so.
Married Couples
For married couples, they are allowed to file for bankruptcy together in the same case,and will incur only one filing fee and one legal fee.In cases where one spouse has all or almost all of the unsecured debt in his name and the remaining spouse has no or very little unsecured debt, it is often advisable that only the individual who has all or most of the household debt file bankruptcy.
If you have filed for bankruptcy, then there are certain actions that you can take after it to speed up the recovery of your credit score. It can be extremely beneficial to discuss what can be done to help your credit score recover with legal counsel.
At theSteve Westerfield Law Office , we are a debt relief agency and our job is to help come up with solutions to your financial problems. Contact us today to see how bankruptcy can help you get out of debt and back on your feet.
This article is for informational purposes only. You should not rely on this article as a legal opinion on any specific facts or circumstances, and you should not act upon this information without seeking professional counsel. Publication of this article and your receipt of this article does not create an attorney-client relationship.
