In my work as an Indiana bankruptcy attorney, I often find that, while one person may be coming to me for help, there are other people to consider. I don’t mean just considering the feelings of family members or Significant Others (although these play an important role in a debtor’s decision-making). I’m referring to a situation where there is a co-debtor. In other words, someone has co-signed for the loan. How are these debts treated when an individual files for bankruptcy in Indiana?
The co-signer remains on the hook even if the main signer is the only one filing Chapter 7 bankruptcy. That means the creditor will be coming after the co-signer for payment if the debt is not reaffirmed by the debtor in the bankruptcy proceedings. It might involve a parent or grandparent, a sister, brother or best friend, or a Significant Other or spouse who did the co-signing. That person may have long ago ceased being “significant” in the debtor’s life, but you can bet that, to the creditor, he or she IS still very significant!
In a Chapter 13 bankruptcy, the co-debtor will be left alone, but only so long as the payments are being made as part of the bankruptcy plan.
Either way, while people filing for bankruptcy may think they’re all alone, their creditors will have their own ideas about “togetherness”!