Should you avoid being named a co-debtor in a family bankruptcy?

by **merla15** » Fri Dec 16, 2011 2:05 am

My in-laws are in the process of filing bankruptcy, and they are naming my husband and his sister as their co-debtors, because in the past the in-laws took out some student loans for both children in their own name. Will this affect my husband's credit score? Will it affect our ability to buy a house? Will my personal assets be endangered because I am married to someone who is named a co-debtor in a bankruptcy?

by **orlondo100** » Fri Dec 16, 2011 2:10 am

Is your husband actually a co-signer on the student loans? It's likely that he is and if so, he will be held responsible for the loans. The actual bankruptcy won't impact his score. But he will have to pay off the loans.

If he co-signed those loans, they should already show on his credit report. If payment hasn't been made, they would show as a negative on his credit.

by **nissim42** » Fri Dec 16, 2011 2:16 am

Oh what a mess. If they can somehow link some of your in-laws debt to your husband, sure it will impact him. Whatever debt they are able to link to him will be in at least part of his responsibility. And for any debts he is found responsible for they can go after many of his assets. And if any of those assets are attached to you, they are target-able. Any assets which are just yours cannot be attached. But in a marriage, many assets are attributable to both. If you have any personal assets that are truly just yours, they cannot go after those.

Based on your description, I assume most they can go after your husband for are the student loans to him. How much can they be? Good luck.

by **kienan** » Fri Dec 16, 2011 2:23 am

If named as a debtor in a BR action your Credit rating will be shot to hell for 7-10 years. Get YOUR own lawyer. Avoid being named as a debtor...even if you have to pay off your student loans.

by **winfrid12** » Fri Dec 16, 2011 2:31 am

Wow..I would not have agreed to this under any circumstances. Your husbands credit will definitely be affected and if you have joint financial obligations, it could affect you as well. I would think there could be another way to pay them back for the student loans but certainly adding you as co-debtors is not something I would agree to.

It sounds like they are guilting you into this situation. If something should happen that they are unable to fulfill future debts and the bankruptcy looms over your heads, you and your husband could be sued and forced into paying thousands of dollars for debts belonging to those family members.

Work out another solution.

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