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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.
Thanks!

Posted from: Ontario

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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.