CoSigned Loans
Hi, right now I am considering personal bankruptcy as my last resort, my problem is that I have a cosigned loan with a family member. If I apply for bankruptcy will that cosigners credit rating be affected if I continue to meet my required payments? Also if I do declare, am I allowed to move cities/provinces during the bankruptcy period?
Thanks for any information
You have touched on a couple of important issues.
First, the presence of a cosigner, if you file for bankruptcy, while you will be cleared from the majority of the unsecured debt, any co-signer is still responsible to ensure that the debt is paid in full. If they do not continue the payments they will face the same consequences any other debtor would (i.e. tarnished credit rating, collection phone calls…).
As for mobility, a filing of a bankruptcy does not have any impact on your ability to relocate. The key is that you need to keep your trustee informed as to where you are. In most major centers you will have access to all the recourses necessary to complete the bankruptcy regardless of the distance in between you and your trustee.
I was feeling very guilty about telling my brother that I wouldn’t co-sign a loan for him as I knew he was in financial difficulty and really wanted to help him but was worried about doing it in that way. After reading that even though he declares bankrupcy and he would be cleared of the majority of his debt I would still be responsible for the part I co-signed for and would be left holding the bag so to speak, took my guilty feeling away and told me I did the correct thing.