Free Consultation

How is a co-signer effected in Bankruptcy?

I have co-signed for a friend, who recently claimed bankruptcy. The loan is for a Leon’s account. Will we have to pay in the end? Is it recorded on our credit that we are linked to a bankruptcy? And if they do contact us after the payment is due (hasn’t came due yet), would we be paying the interest as well? I don’t want to wait around for someone to contact us, to find out we owe double the original amount because of interest.

Posted from: Ontario

One Response to “How is a co-signer effected in Bankruptcy?”

A licensed trustee said...

If you have co-signed a loan for someone that has filed for bankruptcy then you will be held 100% responsible for the debt. All of the normal payment terms will apply so read the contract to see when interest starts, if their is a pre-payment option, etc, etc.