So what if you need to file bankruptcy but you have a loan or credit card that has been co-signed with someone else? The most common circumstance this occurs is when a husband and wife decide only one of them actually needs to file bankruptcy but they are both on several of the loans together. When filing a bankruptcy, only the filing debtor is protected. If a co-debtor is listed, they will still be held responsible for the debt after the bankruptcy is filed.

For example, if a person is behind on a mortgage loan and wants to let the home go in bankruptcy but the loan is co-signed on by someone else, then the debtor that is not filing  will be responsible for that loan when the bankruptcy is filed. This means they most likely would need to file bankruptcy themselves if they want to get rid of that loan also. If it is a credit card that was co-signed on, the co-signer will most likely be responsible for that debt when the other person files bankruptcy. This means that they are liable for the debt and the collectors are able to come after them for the remaining balance.

If you are filing a Chapter 13 bankruptcy and have a co-debtor, it depends on what type of debt that a co-debtor is on. If it is a credit card, the co-debtor is only fully protected if you pay back 100% of that debt. Otherwise they will be held responsible for that debt.

Make sure you tell your attorney about any co-debtors when filing bankruptcy. This is important so that the attorney can make sure that the other party understands what they will still be responsible for the debt after the bankruptcy is filed.