Riverwoods bankruptcy attorney answers some common bankruptcy related questions:
Will filing bankruptcy affect my spouse’s credit? Is he or she responsible for my credit cards if he or she is an authorized user? Filing bankruptcy will not affect your spouse’s individual credit. However, if she is a co-signer on any of the debt that you are filing in your bankruptcy and that is not paid, that debt by the fact that she is a co-signer can affect her. So a creditor has the right to pursue a non-filing spouse if that non-filing spouse does not make payments to the creditor. This is the case even if you file bankruptcy online.
For instance, if a person has a joint account with their spouse and that person decides they want to file a bankruptcy, then while they’re in bankruptcy, the co-signer or co-debtor is protected during the bankruptcy. However, once the bankruptcy is finished, the creditor has the right to go after the co-signer or co-debtor for the amount of the debt. So it’s possible for a creditor to sue a spouse whose spouse filed bankruptcy. Thus, this could be a consideration and something to consider when pondering should I file for bankruptcy?
Will my co-signers be protected? Co-signers or co-debtors are protected in a Chapter 13 case when the case pays the full amounts of the co-signed debts. If the debt in a Chapter 13 case is not completely paid off, then the creditor could go after the co-signer personally after the Chapter 13 plan is discharged and closed. When you file Chapter 7 bankruptcy, the co-signer has a limited protection regarding collateral during the proceeding of a Chapter 7, but after the Chapter 7 is closed and a discharge has occurred, the creditor can and has the right to go after the co-signer after the Chapter 7 has been discharged and closed.
Do I have to go to court? Yes, you will have to attend at least one court hearing. However, this court hearing is not a hearing that is held in front of the judge, and in many circumstances, it is not even a hearing held in a courtroom. The one meeting that you must attend is what is called the 341 Hearing or Meeting of Creditors. At this hearing, the trustee, who is the person holding the meeting, will ask the person filing the bankruptcy several questions under oath regarding the truthfulness and accuracy of the information that was given to them in the bankruptcy papers, petition and any other information that was given to the trustee for purposes of that bankruptcy filing. So the person does not have to go to a court date unless their bankruptcy lawyer specifically tells them to, other than the 341 Meeting, which is conducted by the trustee.