Filing Chapter 13 can protect your cosigners and help avoid bankruptcy

The discharge effect of bankruptcy only benefits the individual filing for relief. If someone else is liable with the person filing, such other persons continue to be liable for the debt unless he or she also files for relief. Only married persons may file a joint petition for bankruptcy relief. All of those who make application for the credit are liable for it, even if an applicant receives little or no benefit from the extension of credit, all applicants are held liable, and even someone who is merely an authorized user of a credit line, one who did not actually sign the application, could be held liable for the debt incurred if he or she in fact took benefit from the extension of credit. In community property states, any debt incurred during the marriage is considered community debt and the creditor may collect the debt from either spouse, regardless of who signed for it. Even if only one spouse is party to the contract, the other spouse may be held liable for the debt.