If my parents cosign on a home loan, and they declare bankruptcy, will my credit be affected? 17 Answers as of February 05, 2011

If my parents cosign on a home loan, and they declare bankruptcy, will my credit be affected?

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Law Offices of Michael J. Berger
Law Offices of Michael J. Berger | Michael J. Berger
No. If you make the payments on the loan. As a cosigner, you will still be liable to repay the loan.
Answer Applies to: California
Replied: 2/5/2011
Law Office of Aaron Nielson
Law Office of Aaron Nielson | Aaron Nielson
More information is needed to help you with this. Is there some sort of connection between this home and yourself? Is this your house or are you also a signer on it? As with all cases, you need to get all of the facts to an attorney so a complete and accurate answer can be given to you.
Answer Applies to: Washington
Replied: 1/14/2011
Christopher Legal Group
Christopher Legal Group | Shawn Christopher
It should not affect your credit, as long as the payments continue being made. If payments are stopped, then the late payments and potential foreclosure will be reported on your credit. Also, a notation may be placed on your credit report, something like "co-borrower filed bankruptcy".
Answer Applies to: Nevada
Replied: 1/12/2011
Law Offices of Daniel A. Higson
Law Offices of Daniel A. Higson | Daniel A. Higson
Depends if there is a default on the home loan.
Answer Applies to: California
Replied: 1/10/2011
Mankus & Marchan, LTD
Mankus & Marchan, LTD | Tony Mankus
Your credit rating should not be affected, although the bank may accelerate the loan or seek additional guarantors. Alternatively, your parents can reaffirm their obligation to the bank in their bankruptcy.
Answer Applies to: Illinois
Replied: 1/10/2011
    George Hoselton Bankruptcy Attorney
    George Hoselton Bankruptcy Attorney | George Hoselton
    Assuming that your parents co-signed on a home loan for you, the bankruptcy will not affect your credit. If the assumption is correct that you are the on the loan with them, you will now be solely responsible for that debt.
    Answer Applies to: Oregon
    Replied: 1/10/2011
    The Law Office of Mark J. Markus
    The Law Office of Mark J. Markus | Mark Markus
    That should not affect your credit as long as you stay current with your payments.
    Answer Applies to: California
    Replied: 1/9/2011
    Greifendorff Law Offices, PC
    Greifendorff Law Offices, PC | Christine Wilton
    Your credit will not be affected, so long as you pay on that debt where you co-signed. You will remain liable for that debt.
    Answer Applies to: California
    Replied: 1/9/2011
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    No, however the credit reporting companies do make mistakes. Monitor your credit rating and report it if they mix you up with your parents.
    Answer Applies to: California
    Replied: 1/8/2011
    Gus Johnson Attorney at Law
    Gus Johnson Attorney at Law | Gus Johnson
    I would discuss the situation with the mortgage holder, there's nothing clear cut in your question from a legal standpoint.
    Answer Applies to: South Dakota
    Replied: 1/8/2011
    Ursula G. Barrios Law
    Ursula G. Barrios Law | Guillermo Machado
    It may appear on your credit report that someone on the account has filed for BK, but you will still be liable for the loan (unless you file BK).
    Answer Applies to: California
    Replied: 1/8/2011
    Bankruptcy Law Office of Robert Weed
    Bankruptcy Law Office of Robert Weed | Robert Weed
    The short answer is no assuming that you or they are still paying the loan. Your credit will be affected by whether or not the loan is being paid.

    It used to be that the creditors and credit bureaus would park a bankruptcy on everyone who cosigned on the loan even people who didn't file and were paying. About ten years ago the credit bureaus put in a new system, called Metro 2, so they can report bankruptcy on the people who filed bankruptcy, and current on you, if it is still being paid. They sometimes do this wrong, though. It would certainly be a good idea to check your credit with all three bureaus and make sure they are doing it right.
    Answer Applies to: Virginia
    Replied: 1/8/2011
    Law Office of David P. Farrell
    Law Office of David P. Farrell | David Farrell
    No. By co-signing your mortgage loan your parents personally guaranteed your promise to repay the loan. In other words, if you fail to pay the lender may look to your parents for payment. If they file bankruptcy and obtain a discharge of the debt, they will no longer be responsible for it. Your credit should not be affected.
    Answer Applies to: California
    Replied: 1/7/2011
    Law Offices of Steven A. Wolvek
    Law Offices of Steven A. Wolvek | Steven A. Wolvek
    It may show up on your TRW that the "debt" is in bankruptcy however you would be able to show future creditors that it was your parents that filed.
    Answer Applies to: California
    Replied: 1/7/2011
    Carballo Law Offices
    Carballo Law Offices | Tony E. Carballo
    Your credit is not affected if a co-signer of any type of loan files for bankruptcy. Of course that assumes that the payments on the co-signed debt will continue to be made timely. Home loans are not dischargeable because they are secured debts. The bank might refuse to send you statements while your parents are in bankruptcy for fear of violating the automatic stay but you must continue to make the required payments by mail. You need to find out where the payments should be sent and make sure you have proof of payment. If you do, then your parents' bankruptcy should not affect your credit rating.
    Answer Applies to: California
    Replied: 1/7/2011
    Law Offices of Lady Justice
    Law Offices of Lady Justice | Mona Patel
    If the home loan payments are still being paid, then it will not affect your credit. If the home loan payments are not being paid, then as a cosigner you are still liable for the whole debt. So if you do not make payments, your credit will be effected.
    Answer Applies to: California
    Replied: 1/7/2011
    DiManna Law Office, LLC.
    DiManna Law Office, LLC. | Dawn DiManna
    As long as you are current on the loan they co-signed on then it should affect you.
    Answer Applies to: New Hampshire
    Replied: 1/7/2011
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