What if my cosigner files for bankruptcy?

If you are the primary borrower this likely won’t affect you, assuming you are current on your loan payments.  However, if you aren’t current and your cosigner files for bankruptcy, the creditors may come after you.  Also, if your co-signer’s name was on the title of the property in question, the lender may be able to repossess the property or place a lien on it.If the debt is a community debt, meaning that you live in a community property state, your spouse is your cosigner, and the debt was incurred during the marriage using community funds, you will be liable for the entire balance of the loan.  Before your spouse files for bankruptcy, make sure to carefully read over any loan documentation you have to see what the lender’s policy is in regards to cosigner bankruptcies.