Your exwife filed bankruptcy How do you get the federal bankruptcy to excuse the mobile home debit you co-signed for?

Answer 1

Cosigning on a debt for anyone, regardless of relationship status, is very tricky business and should never be considered lightly. You may have a great relationship with the person who needs your help at the time of signing but there is no way of knowing how things will change. Cosigning for any type of loan, even for a family member, means you are undertaking a huge risk.

The answer to this question depends largely on the type of bankruptcy filing your ex-wife decides to make. Her options are either Chapter 7 or Chapter 13.

If your ex-wife decides to file for chapter 13 bankruptcy then your interests as cosigner will be protected. Under a chapter 13 filing, also known as a wage earners bankruptcy, your wife will be required to make arrangements for the repayment of parts of her debt. Her creditors will agree to these arrangements and once the agreed upon payments are made her account with the creditor will be closed, regardless of what amount of the total original balance is left over.

Your problems as a cosigner will emerge if she decides to file for chapter 7 bankruptcy. Under chapter 7 bankruptcy, your ex-wife will have the opportunity to discharge all of her debts. As far as the creditor is concerned, the courts may alleviate her of her portion of the responsibility but they will in this case turn to any cosigners still expecting to receive payment. If she successfully completes a chapter 7 filing you will be stuck paying the balance owed on the mobile home.

If this situation will cause you considerable financial burden you may need to consider whether or not you need to file a bankruptcy petition of your own. A qualified Minnesota bankruptcy attorney, or one in your own state if you are not in Minnesota, should be able to help you determine what steps to take next.