The moment you file for bankruptcy, the law immediately initiates an “automatic stay” which stops all creditors from taking actions to collect their debts not only from you but also from any co-signers on the debts. Any payments made by your co-signers after you’ve filed can be recovered. The protection your co-signers will continue to receive throughout your bankruptcy and after it concludes will depend on how you choose to repay your debts. If you choose to file a Chapter 13 bankruptcy and the plan you establish requires repayment of the co-signed debt in full, your co-signers most likely will not be contacted by the creditor. The protection that your co-signers receive will last only as long as you remain in a Chapter 13 repayment plan and fulfill its obligations. If you don’t pay back the debt in full by the time the case ends, your co-signers will have to pay whatever portion of the debt you didn’t pay under your Chapter 13 plan, including interest and other charges that weren’t allowed in the repayment plan. In short, the discharge you receive on a debt in a bankruptcy doesn’t affect a co-signer’s obligation if you fail to repay the debt in full. Of course, this is why the lender required a co-signer in the first place. Ultimately, the co-signer’s role, whether it’s your mom or your friend, is to take responsibility of the debt when you can’t.
