If you have an authorized signer (cosigner) on any account, you want to make sure that you know which ones they are. Prior to filing bankruptcy, you should go over all your accounts to verify that there is no other person on the debt that you will be submitting to the bankruptcy court. If by any chance you forget to remove this other individual from your debt account, the creditor will transfer the balance of this account to this other person hence making him/her responsible for the debt while you have bankruptcy protection.
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Let me give you a concrete example. I had a credit card with $55,000 total balance which I had submitted into bankruptcy as part of the debt I wanted relief from. Since the account was opened years ago, I totally forgot that my sister was a cosigner on the account, even though her name was clearly stated on the monthly statements. Since unsecured debt gets wiped out with Chapter 7 bankruptcy, I was more than happy to include this credit card in the filing. What I failed to realize is that there is a cosigner on this account when I filed for bankruptcy protection.
Even though I had filed for bankruptcy protection, because I had forgotten to remove the cosigner from one of my credit card, a family member ended up having to be legally responsible for the debt. The creditors will not listen to your rationale, they just want someone else to pay, and the cosigner on the account is the perfect person to do so. Even though the job of your bankruptcy lawyer is to protect you, please be aware that your lawyer has many cases under his/her, and he/she might miss this fact when preparing your bankruptcy petition.
When you are gathering your paperwork for your bankruptcy lawyer, make sure you review all your accounts to make sure that ONLY you, and no one else, is a secondary card holder, co-signer on the account. Just when you think you have finally gotten rid of the financial burdens that has plagued you for some time, it is even more devastating to find out that you have just transferred your debt over to someone else. Don't forget that you have an obligation to protect your loved ones even if you are filing for bankruptcy protection. Since you have already decided to file for bankruptcy protection, take the extra effort to review all the accounts that you have to make sure that no one will be affected by your decision.
If you need additional information on bankruptcy, please visit us online at tofilebankruptyornot.com.
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