What happens to my credit as a co-signer?
June 20th, 2008 by Questions
My Common-Law Spouse is claiming bankruptcy. We are separated. I have co-signed on a few of his loans including a line of credit, a leased vehicle, and we have a joint credit card together. Both of our names are also on the mortgage of our home. At this point I am unable to remove his name from the mortgage and apply solely on my own. He is also unable to remove my name from the line of credit and the lease of the vehicle. What is going to happen to me, my credit, the house once he claims bankruptcy. If I am the co-signer, does that mean I become responsible for paying back these debts?
Posted from: British Columbia
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June 23, 2008 at 9:22 am, Barton Goth - Goth & Company Inc. - Bankruptcy Trustees said:
If you have cosigned on any of these debts you have essentially said that you will ensure that the debt is paid 100% regardless what happens to the other party. AS a result you will be responsible for any of this joint debt. Now in some instances this may not be a problem. For instance, the house, it is a secured asset likely payments will continue to be made on the house by you and your husband and there wouldn’t be any amount that is cleared by the bankruptcy, so it essentially remains unchanged. The same thing will likely happy to the leased vehicle assuming you common law is planning on retaining the vehicle.