Legal Question in Bankruptcy in New York

Re: Bankruptcy effect co-signer?

A debtor in bankruptcy may not need a co-signor on a lease (or on a car loan, or a mortgage). These are things where, should payment not be forthcoming from the debtor, there is a clear and good remedy (eviction or repossession). If the debtor wants a roof over her head, she'll pay the rent.

The landlord may require more of a security deposit up front without a co-signor on a lease of a bankrupt individual.

If the landlord of the apartment the debtor MUST have insists on a co-signor because of bad credit, the bankruptcy itself is likely to do nothing to a co-signor on a lease. However, should the debtor not pay the rent, the landlord would have clear legal grounds to go after the co-signor for the unpaid amount and, should the co-signor not pay up, get a money judgment against the co-signor as well as against the debtor. This would be a blight on the co-signor's credit report that is hard to get rid of.

No creditor that is properly listed in a bankruptcy filing can usually come after a co-signor on a lease signed after a bankruptcy petition is filed.

THE INFORMATION PRESENTED HERE IS GENERAL IN NATURE AND IS NOT INTENDED, NOR SHOULD IT BE CONSTRUED, AS LEGAL ADVICE. FOR SPECIFIC ADVICE ABOUT YOUR PARTICULAR SITUATION, CONSULT YOUR ATTORNEY.