Guaranteed Debt in an Individual Bankruptcy

Guaranteed debt may refer to debt that is guaranteed by a third person such as a co-signer or there are some circumstances in which a debtor chooses to guarantee a particular debt they owed prior to bankruptcy for some reason, such as to retain certain property or remain in good standing with a particular creditor. Whatever the reason, a guaranteed debt is a debt that a person has agreed to pay despite bankruptcy.

Filing Bankruptcy and Guaranteed Debts - Co-Signer

If you had a co-signer on one or more of your debts and you opt to file for bankruptcy, your co-signer could be required to pay your debt. After the co-signer pays the debt, they often have the right to seek compensation from you for the debt. This can get in the way of relationships with friends and relatives who co-signed for you on debts you default on.

When you file for bankruptcy, your creditors must cease all legal actions against you. Unfortunately, if another person has guaranteed your debts, the creditor can continue taking action against the guarantor. It may be possible for your attorney to file a special motion to stay the action of the creditor against any guarantor. You must discuss this with a bankruptcy attorney to see if it is an available option in your case.

Guaranteed Consolidation Loans

Some consolidation loans for paying off debts are called guaranteed loans. It is important that you know the terms and conditions before entering into a loan agreement. While lenders are governed by fair lending practices laws, there are still unscrupulous lenders that prey on debtors by imposing high interest rates and other undesirable conditions on those who need financial rescue.

The best thing to do if you are concerned about your guaranteed debt or have questions about your financial situation and whether or not you are eligible to file for bankruptcy is to contact an experienced attorney.

Getting Legal Help

Because bankruptcy law and guaranteed debt is complicated law, getting the advice of an experienced attorney is wise. You should seek experienced and reputable bankruptcy counsel if you are seriously considering whether bankruptcy is right for you. An experienced attorney will meet with you and help you gain perspective regarding your debt situation. An attorney may be able to help you see other solutions that are available to you too.