Legal Question in Bankruptcy in California

Your mother filing bankruptcy will not affect your sister's credit.

Also, bankruptcy law requires that all assets and all debts be included in the schedules. If your mother fails to include an asset or a debt, she could be denied her bankruptcy discharge. Filing for bankruptcy however does not mean that she will lose the house, that almost never happens. She may be required to reaffirm the debt. In any event, as long as the monthly mortgage payment is kept current, the bank will not foreclose.

I suggest that your mother consult with a qualified bankruptcy attorney in your area to discuss her case. The money spent on an attorney is well worth the peace of mind that she will have in knowing her case is handled correctly.

I would just expand the above answer to add that the credit bureaus may add a notation in your sister's credit report that the Co-debtor has filed a bk..and your sis may need to explain to a future creditor that she is not involved in the bk.