I took out a personal loan in 2005, filed chapter 13 in 2006 and due to our home burning down in 2008 was required to convert to chapter 7. My sister co-signed that loan and the credit union after all this time has not contacted regarding paying the loan. She just went to refinance her home and was denied due to this loan she cosigned. Our bankruptcy attorney said they cannot legally require her to repay the loan if it has been 6 years since the last payment. Is that true? And what can I do to help her get this cleared up on her cedit?
1 Answer from Attorneys
What her attorney has said is not exactly true. The attorney is stating that if they should sue her, she could assert as an affirmative defense the statute of limitations and prevent a judgment from being entered against her. This is not the same as saying the debt is not owed. It is owed but subject to that defense. Affirmative defenses are asserted in a court of law not at the credit report bureau.
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