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Chapter 13 bankruptcy remains one of the most effective debt solutions. It opens up workable payment options, stops creditors, and helps you keep many of your assets. But what about cosigners and guarantors connected to your debts?

According to the legal team at Bueker Law Firm in Stuttgart, AR, your bankruptcy may also affect them, and it’s important to know how. They could be left to pay your debts, which is why you should take the necessary steps with an attorney to protect them.

A cosigner or guarantor is someone who has signed a debt with you as assurance. Creditors are sometimes dubious about loaning money if you have poor credit but will accept a guarantor or cosigner as backup. Ideally, they never have to get involved beyond that, but when you’re unable to pay your debts, it suddenly becomes their problem.

attorney-bueker-law-firmCreditors can target cosigners and guarantors when you don’t pay your mortgage, auto loan, or other debts they may be tied to. This can become an immense financial and emotional burden, and it’s important to report any harassment to your lawyer on their behalf.

Chapter 13 bankruptcy's biggest benefit is that you’re not being excused from debt—you’re simply making a better plan with courts to repay it. This keeps cosigners and guarantors safe, as you can file a “codebtor stay” that allows them to fall into the same repayment plan while also escaping creditors.

If you were to file Chapter 7 bankruptcy, the debt would simply pass to the cosigner and cause them significant hardship. To protect them through Chapter 13 bankruptcy, you have to stick with the bankruptcy repayment plan, as well as avoid having the stay lifted by creditors.

If you’re considering bankruptcy, it’s best to secure legal guidance, and an attorney at Bueker Law Firm can help. Their legal team has extensive experience with bankruptcy law and can help you find a solution that works for you and your cosigners. Call (870) 673-1313 to schedule a consultation with an attorney at law and visit their website and Facebook to learn more about their practice

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