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Paul Stuber, Attorney at Law | Paul Stuber
Only if you are behind on the payments.
Answer Applies to: Colorado
Replied: 1/12/2012
Benson Law Firm | David Benson
You must first seek an order to lift the automatic stay from the bankruptcy court.
Answer Applies to: Ohio
Replied: 1/11/2012
Bankruptcy Law office of Bill Rubendall | William M. Rubendall
The purpose of a co-signer is to guarantee payment if the primary borrower isn't making the payment. If the primary borrower files bankruptcy the lender can pursue the co-signer as if there is no bankruptcy.
Answer Applies to: California
Replied: 1/10/2012
The Schreiber Law Firm | Jeffrey D. Schreiber
If you are asking if the co-signer files bankruptcy, can the bank foreclose against the property? Generally, if the loan is current and being paid by the primary borrower, the bank will take no action. However, if the co-signer is also on title, they need to make sure that any equity is protected by an applicable exemption as the bankruptcy trustee can sell the property if there is unprotected equity which makes its possible to pay money to the unsecured creditors.
Answer Applies to: California
Replied: 1/10/2012
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
The question is a little confusing. During the bankruptcy, the creditor can not take action to foreclose with getting the permission of the court first (call "relief from stay"). As for going against the co-signer - they can do that unless the debtor is in CH13.
Answer Applies to: California
Replied: 1/10/2012
Law Office of Christine A. Wilton | Christine Wilton
When a person files bankruptcy, they will disclose all their assets, and then state their intention as to those assets. The filing of the bankruptcy case will stop collection efforts for the Debtor [person that filed bankruptcy]. Action cannot be taken against any asset of the bankruptcy estate while the case is pending ["Active"], unless the creditor obtains court approval through a motion for relief.
Answer Applies to: California
Replied: 1/10/2012
The Law Office of Jill Rose Quinn | Jill Rose Quinn
Technically yes. The mortgage holder normally has the right to declare that the bankruptcy of a co-signer is an event of default. However, as long as the mortgage is current, the mortgage company is unlikely to take any action other than to request a reaffirmation of the debt.
Answer Applies to: Illinois
Replied: 1/10/2012
Law Office of Lynnmarie A. Johnson | Lynnmarie Johnson
Yes, if the other person is not paying the mortgage payment, the creditor can ask the court to lift the automatic stay and begin foreclosing on the house. Or the mortgage company may choose to wait until the first co-signers bankruptcy is done and then start the foreclosure. However, in MI, real property does not have to be reaffirmed, but you must keep the payments current. So if the payments get made, you get to keep the house. Good Luck!
Answer Applies to: Michigan
Replied: 1/10/2012
Carballo Law Offices | Tony E. Carballo
The automatic stay in a Chapter 13 case protects debt co-debtor but not in a Chapter 7 case. However, there are no co-signers in real estate loans. The person who filed the bankruptcy case is actually both a co-owner and co-debtor. Since the person who filed for bankruptcy is on title (co-owner) and on the loan (co-debtor), then the automatic stay in his case applies to stop foreclosure in either a Chapter 7 or Chapter 13 case. The Chapter 13 co-debtor stay is not necessary. Therefore, no action can be taken against the property while one of the owners is in bankruptcy unless the bank obtains permission from the bankruptcy court to sell the house. That is called relief of stay.
Answer Applies to: California
Replied: 1/10/2012
Heupel Law | Kevin Heupel
Absolutely. Bankruptcy protects the person who filed, but not the co-debtor.
Answer Applies to: Colorado
Replied: 1/10/2012
Mazyar Hedayat and Associates | Mazyar Malek Hedayat
Bankruptcy stops all actions by creditors against the debtor and the debtor's assets. This will include the home for which you cosigned if you have an ownership interest in it as well.
Answer Applies to: Illinois
Replied: 1/10/2012
Law Office of David P. Farrell | David Farrell
Generally, when you purchase real property in California you sign two operative documents: a promissory note and a deed of trust. The promissory note is the promise to repay the debt; the deed of trust secures the promise to repay with the property. Filing bankruptcy (and receiving a discharge) generally absolves the debtor of personal liability on the promissory note, but the lien against the property created by recording the deed of trust remains, so if the debtor quits paying the mortgage post-petition the lender can still foreclose the property under the deed of trust even though the debtor is not personally liable for the debt. Thus, a co-signor's bankruptcy filing will likely have no effect on the property so long as the mortgage payments remain current. Of course, it is best to consult with an experienced attorney and let him or her analyze the terms of the particular promissory note and deed of trust.
Answer Applies to: California
Replied: 1/10/2012
