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LegalCornerTM - Bankruptcy Basic Facts F.A.Q.'s

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Q.Is there anything I can do to protect a Co-Signer on a loan if I am planning to file bankruptcy?

A.No. The lender can require the co-signor to make payments on a loan once the principal has declared a Chapter 7 bankruptcy on the credit. This fact makes it extremely important that those considering co-signing for a loan for another be ready, and able, to pay the loan in the event that the principal signor defaults. However, a debtor who is planning on filing for bankruptcy can protect his or her co-signers by opting to file for a chapter 13 bankruptcy. Under Chapter 13 bankruptcy cosigners receive the same protection that you receive under Chapter 13. Through a Chapter 13, we will protect your cosigners from collection activity, and the creditors must wait to be paid. So, if you friend or relative cosigned on your vehicle, and you are having trouble affording the payments, we can put your remaining balance inside a Chapter 13.




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