Transcript:

Hello, this is Jeff Kelly. Today is January the 29th 2021. And in today’s podcast, I want to answer the question, how will filing bankruptcy affect your cosigner? The short answer is you filing bankruptcy will damage your co signers credit, how much damage? The answer is, you’re not going to know until after you file.

Most bankruptcy attorneys are not going to answer this question for you. I recently engaged in a Facebook conversation on this topic with fellow consumer bankruptcy attorneys from all parts of the United States and I received some really good feedback. And I really appreciate the very open and honest answers I got from a lot of people. And, you know, one attorney explained that they just avoided this topic altogether with their clients by asking by stating that, hey, look, I only represent you and I don’t represent your cosigner, I’m not going to talk about it. And the reason they do that is they’re trying to basically avoid the subject. Because a lot of people if they knew the truth, that it was going to hurt their cosigner, they, they either might not file bankruptcy at that time, or might try to work something out.

Now, personally, I believe honesty is the best policy. When a client comes in and meets with me or one of my associates, we are upfront we tell the truth. It is a core value of this law firm. And I believe it’s something that really separates us from a lot of others if you don’t need to file bankruptcy.

Number one, we’re going to tell you that and then we’re going to go into some detail with you to explain why you don’t need to file I think it’s much better to be honest and open about the truth, you’re going to get much happier people you have a much happier life. And I’ve got the Google reviews to back it up, check it out. So uh, you know, another attorney said that he would, you know, point to a car out in his parking lot. And so Oh, wow, look at that car. And basically just, you know, again, try to avoid it. And I just, I just think it’s a terrible, terrible idea to sweep this issue under the rug before you file because in most consumer bankruptcy cases, the cosigner is almost always a relative, or a super close friend. Can you imagine how upset a cosigner relative friend is going to be when they go to buy a new car, and they get the big denial? Because their credit score was unexpectedly lowered? And then they figure out it was because you filed a chapter 13 and didn’t tell them anything about it? Yeah, this kind of surprised always ends with someone getting upset, and it could severely damage a close relationship. Personally, I think it’s much much much better to warn the cosigner before the case is filed. So is there anything that a cosigner can do to avoid the damage to their credit score?

Well, you know, the answer is yes, but it’s probably not gonna happen. Number one is pay off the debt, the cosigner can pay off the debt before the bankruptcy case