Legal Question in Bankruptcy in Maryland

Re: about co-signing

There is a co-debtor stay in Chapter 13 that prevents creditors from pursuing co-debtors for consumer debts (not other debts, such as business debts). If the plan pays the creditor in full, it is likely this stay will remain in effect. If not, the creditor will be free to pursue the co-debtor once it obtains relief from the stay, which will be granted because the debtor is not making the creditor whole.

As to the second question, it depends on the status of the garnishment and whether you can exempt the money that was garnished. If the money has not been paid to the creditor yet, it will likely be subject to release (although it is an asset of the estate, and has to be exempted or it will go to the trustee in a 7 or have to be taken into account in figuring plan payments in a 13). If it has been paid to the creditor within 90 days, and it is either not on a consumer debt or is more than $600, it will probably be recoverable (by the debtor if exemptable, otherwise by the trustee). Over 90 days from payment, it's likely not recoverable.

You should discuss these issues with respect to your specific situation with a competent bankruptcy lawyer. We practice bankruptcy law throughout MD, VA, and DC, so feel free to contact us if you have any further questions.