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Secured debt by someone else and bankruptcy

Wondering what happens if we file bankruptcy, and we have a secured line of credit with my mother in law? We have a $30000 line of credit that my mother in law secured with her savings, but we are faced with filing for bankruptcy and want to know what will happen to her and her savings if we do file?

One Response to “Secured debt by someone else and bankruptcy”

Jillian Taylor-Mancusi, Trustee | B.A. | C.I.R.P said...

Your mother in law guaranteed your debt. Basically that means if you default on the payment of the debt (don’t pay it), your mother in law will be called upon to pay it (she may have to use her savings). If the $30,000.00 line of credit is your only debt you may wish to negotiate between your mother in law and the creditor another arrangement that could avoid bankruptcy.