Legal Question in Credit and Debt Law in New Jersey

Co-Applicants

If the primary applicant filed bankrupancy, is the co-applicant on the contract responsible or does the debt fall under the umbrella of the bankruptacy?


Asked on 7/08/06, 10:06 pm

2 Answers from Attorneys
John Corbett Corbett Law Firm LLC

Re: Co-Applicants

There is no "umbrella." A bankrupcy discharges the petitioner and no one else. Co-makers and joint parties on an instrument remain obligated.

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Answered on 7/09/06, 1:23 am
Daniel Press Chung & Press, P.C.

Re: Co-Applicants

The discharge only discharges the bankruptcy debtor. However, in a Chapter 13 (only), there is a co-debtor stay which, unless relief is granted to the creditor, precludes the creditor from pursuing co-obligors on consumer debt while the debtor is paying the debt through a plan. In addition, in community property states (which do not include MD or NJ), the non-debtor spouse is protected by virtue of the discharge due to the prohibition against collecting against community assets.

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Answered on 7/09/06, 7:16 am


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