How will my parents bankruptcy affect me? 22 Answers as of August 07, 2011

When I was in college my dad cosigned on a private student loan. Now for his own reasons he and my mom plan to file ch 13 bankruptcy, and I want to know how this can or will affect my credit. Will I be able to get new loans while they're in repayment (I want to go back to school)? Will I be able to buy a new home while they're in repayment?

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Melinda Murphy Dionne, PC
Melinda Murphy Dionne, PC | Melinda Murphy Dionne
Who is paying the student loan back? To avoid any negative consequences to you, I would recommend that you repay the loan directly. Your payments may be limited in the amount of the loan they can repay under the terms of their Chapter 13 plan. If they do not repay the loan if full, with interest, it will have a negative impact on your credit.
Answer Applies to: Alabama
Replied: 8/7/2011
Financial Relief Law Center
Financial Relief Law Center | Mark Alonso
Your parent's bankruptcy should not impact your credit. Only the person(s) filing the bankruptcy will have their credit impact. The issue of co-signers comes up with respect to liability on a debt that the filing debtor is including in the bankruptcy. Who is making the payments on the student loans? You or your parents? Are these included in the bankruptcy? Either way, if you're making the payments or if your parents are making the payments as part of the bankruptcy, the creditor is being paid and will have no issue to complain about, and your credit should not be impacted.
Answer Applies to: California
Replied: 7/13/2011
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
It will not affect you so long as you make the payments.
Answer Applies to: California
Replied: 7/13/2011
Apple Law Firm PLLC
Apple Law Firm PLLC | David Goldman
As long as you are not relying on their credit, it should not affect your situation. This is a question that they could ask their bankruptcy lawyer to explain to them and you as often the exact answer will depend on the specific circumstances that are present.
Answer Applies to: Florida
Replied: 7/13/2011
Indianapolis Bankruptcy Law Office of Eric C. Lewis
Indianapolis Bankruptcy Law Office of Eric C. Lewis | Eric Lewis
Your parents' bankruptcy does not affect your credit in any way.
Answer Applies to: Indiana
Replied: 7/13/2011
    Guardian Law Group PLLC
    Guardian Law Group PLLC | C. David Hester
    Your parents bankruptcy will have no effect on you. The debt that your father co-signed on with for you does not change your liability on the debt. It will effect your fathers responsibility as the gauantor on the debt, in effect it will modify the safety net which he provided to the lender. Your parents bankruptcy will have no effect on your credit. This is not strictly a bankruptcy question but rather a Fair Credit Reporting Act (FCRA) issue. If this debt is reported in any negative way on your credit you may have a cause of action against the lender. (Unless you are late or default of course). Whether you are able to get new loans (including home loan)while your studentloans are in repayment is wholly dependant on lender guidelines, debt to income ratio, job history and other factors that are used by lenders, but your parents bankruptcy is not one of those factors.
    Answer Applies to: Utah
    Replied: 7/13/2011
    Bankruptcy Law office of Bill Rubendall
    Bankruptcy Law office of Bill Rubendall | William M. Rubendall
    When your parents file bankruptcy it doesn't affect you and certainly doesn't go on your credit report. If they have co-signed for student loans you are still obligated. There is no discrimination on account of bankruptcy for someone who files bankruptcy. This is true for someone whose parents filed bankruptcy because there is no relationship between their bankruptcy and your creditworthiness.
    Answer Applies to: California
    Replied: 7/12/2011
    Carballo Law Offices
    Carballo Law Offices | Tony E. Carballo
    Your parents' bankrutpcy will not affect your credit so long as you continue to make timely payments on the student loans. The Chapter 13 Plan will have to state that you will make the student loan payments directly.
    Answer Applies to: California
    Replied: 7/12/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    There is a co-debtor stay that may protect you in a Chapter 13, depending on their plan, but the payment status of loans may affect your ability to get certain types of loans. Your credit may be impacted depending on how their case goes.
    Answer Applies to: Georgia
    Replied: 7/12/2011
    Kevin Bluitt, Attorney at Law
    Kevin Bluitt, Attorney at Law | Kevin Bluitt
    Your parents' bankruptcy will only affect you to the extent that you will remain responsible for the debt even if they are discharged by Bankruptcy Court. The creditor will simply look to you for collection. Their bankruptcy will not affect your credit...unless you cannot pay the loan. Remember your credit rating is separate than theirs. By the way...if it was a student loan as a general rule your parents will not be able to discharge it, absent a showing of extreme hardship.
    Answer Applies to: Florida
    Replied: 7/13/2011
    Law Office of Lynnmarie A. Johnson
    Law Office of Lynnmarie A. Johnson | Lynnmarie Johnson
    Assuming that your were the primary signer, since it was your loan, this should not affect you at all. Your dad can't discharge his obligation except for under very limited circumstances, so really the only thing is that you will probably not be able to use them as a co-signer if you decide to go back to school and need more loans.
    Answer Applies to: Michigan
    Replied: 7/12/2011
    Benson Law Firm
    Benson Law Firm | David Benson
    As long as you stay up to date on any obligations with your name on them, you should be fine.
    Answer Applies to: Ohio
    Replied: 7/12/2011
    The Orantes Law Firm
    The Orantes Law Firm | Giovanni Orantes
    Their bankruptcy case should not affect you. In fact, even though they would list the loan they co-signed for you as a debt in their bankruptcy case, they will not be able to discharge it unless they are undergoing an extremely difficult situation (such as some physical or mental ailment that prevents one or both from earning more than just the amount they need to support themselves). You would still be liable under the student loan obligation and their bankruptcy will not affect your ability to buy a new home.
    Answer Applies to: California
    Replied: 7/12/2011
    The Law Offices James Burns
    The Law Offices James Burns | James Burns
    Your parents' bankruptcy filing will not have any impact on your credit score. However, the bankruptcy will have an impact on the credit score of your parents and as a result they will likely not be able to co-sign on anymore of your debts. The bankruptcy will not impact your ability to obtain student loans, although without a co-signor your student loans may now be subject to less favorable terms (i.e. higher interest rate). Similarly, their bankruptcy will not impact your ability to obtain a home mortgage, but keep in mind that your parents will likely not be able to co-sign a home loan for you.
    Answer Applies to: New Mexico
    Replied: 7/12/2011
    Law Office of Maureen O' Malley
    Law Office of Maureen O' Malley | Maureen O'Malley
    They'll be paying those through the Chapter 13, I believe, if they've already been paying. If they don't, the debt is yours. If you've been paying, then there's no effect because you'll continue to pay. Bankrupcty isn't a reason to deny further loans, as student loans aren't dischargeable.
    Answer Applies to: Virginia
    Replied: 7/12/2011
    The Schreiber Law Firm
    The Schreiber Law Firm | Jeffrey D. Schreiber
    It may depend on what they are proposing to repay in the Chapter 13. Student loan debt is not dischargeable, so it is likely that the full amount due would have to be paid.
    Answer Applies to: California
    Replied: 7/12/2011
    Law Office of Xochitl Anita Quezada
    Law Office of Xochitl Anita Quezada | Xochitl Anita Quezada
    Their bankruptcy will not affect your credit. Your dad will not be able to discharge the student loan. As long as you are current you are fine. I'm sure your dad will not be able to co-sign for another student loan in the future.
    Answer Applies to: California
    Replied: 7/12/2011
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