Will My Filing Bankruptcy Hurt My Mother, Friend, Etc. Who Co-Signed on a Loan for Me?

People often turn to a close relative or friend when having financial trouble. If a relative or friend has co-signed a loan for you and can no longer afford to pay the debt, bankruptcy generally does not keep the lender from eventually being able to collect from the co-signer. In a Chapter 13 bankruptcy, you may be able to reorganize certain co-signed debt, paying it off over time. In some cases, the lender cannot take action to collect from the co-signer while the bankruptcy is pending. If the loan isn’t paid according to the contract, your co-debtor’s credit will be affected.