When an individual files for Chapter 13, there is a provision in the Bankruptcy Code that provides that the filing of a Chapter 13 not only stops any action to collect a debt from the debtor, but also stops any action to collect a debt from a co-signor who is listed on the petition. In order to fully protect the co-signor under the Chapter 13, the debt must be paid in full at the contract rate of interest. The payments; however, can often be extended and therefore the monthly payment to the creditor can be decreased.
Tags: Chapter 13 Bankruptcy, Concerns About Filing For Bankruptcy, Repossessions
