How will a bankruptcy filing affect the co-signer of a loan?

I am likely filing a Chapter 7 or Chapter 13 bankruptcy but not sure which one yet. Currently I have student loans which I know get “included” in a bankruptcy but not truly included because the debt still stands in the end. One private student loan is co-signed by a family member and I don’t want her credit to be damaged in any way. Even if the info is included in the bankruptcy paperwork, I want to know if it will affect her credit rating as long as I’m still staying current on the payment. I know about the co-debtor stay but I don’t anticipate anyone going after her since I will continue payments on time. I’m just trying to see if the loan will still impact negatively simply for the fact that it might say bankruptcy.

Asked on July 24, 2014 under Bankruptcy Law, California


MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

Student loan debts cannot be discharged in bankruptcy. You need to consider that any such filing can and will impact a co-debtor. You may wish to consider excluding the debt as it can't be discharged in any case. Inform your co-signer you plan on filing bankruptcy and allow him or her the opportunity to do research with you on options available. 

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