QUESTION

What happens if I don’t file bankruptcy, am I stuck with the debt?

Asked on Jan 12th, 2013 on Bankruptcy - Minnesota
More details to this question:
My friend and I purchased a timeshare together. Our fell apart, but he said he would pay the bill but couldn’t because he lost his job. Now the timeshare debt is in collections. My friend wants to file bankruptcy to discharge the debt.
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14 ANSWERS
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Daniel James Wilson
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Answered on Jan 21st, 2013 at 1:31 PM
If you are on the promissory note you are liable for the debt.

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Answered on Jan 18th, 2013 at 6:34 AM
The answer is pretty simple. The creditor is likely to come after you for the debt if the debt is discharged in a bankruptcy by your friend. You signed a document that probably makes you liable for the entire debt if the other person does not pay the debt. Of course, it is possible that you signed only as a buyer and your friend is the only one liable for repayment. You need to have an attorney review the document to determine if you are liable and whether you are liable for the entire debt or only a portion of the debt.

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Answered on Jan 16th, 2013 at 7:41 PM
Any contract remains enforceable until the debt is paid in full, negotiated or a bankruptcy is filed by the borrower/obligor. Your obligation to pay the debt will not go away even if a co-borrower files for bankruptcy. Be careful.

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Answered on Jan 16th, 2013 at 7:33 PM
If you owe debt and have a co-debtor, and the co-debtor files for bankruptcy, then yes, usually you will be responsible for the debt yourself due to the other debtor's bankruptcy, unless the debt is found non-dis chargeable in bankruptcy or the discharge is denied.

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Answered on Jan 16th, 2013 at 7:13 PM
If your friend files bankruptcy he should obtain a Discharge of his obligation to repay the timeshare debt. If you were jointly obligated on the debt with your friend, you will be then obligated for the entire balance due.

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Answered on Jan 16th, 2013 at 1:48 PM
Yes, you will still be liable for that secured debt if your friend files ch. 7 bankruptcy. The timeshare group might settle for a deed in lieu of foreclosure and forgive the remaining debt. If not, perhaps you can negotiate a settlement.

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Answered on Jan 15th, 2013 at 2:02 PM
Perfectly legal for him to file and yes, you would be liable for the debt.

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Answered on Jan 15th, 2013 at 2:01 PM
If you don't file, you are stuck with the debt (100% of it).

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Answered on Jan 15th, 2013 at 2:00 PM
If your friend files bankruptcy and receives a discharge of the timeshare debt, it has no real effect on you. The bankruptcy does not discharge the actual debt. Instead, the bankruptcy discharges his personal liability on that debt and blocks the creditor from pursuing him for the debt. The underlying debt will still exist and they are allowed to continue pursuing you for it if that's what they want to do.

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Answered on Jan 15th, 2013 at 1:59 PM
As a co-debtor, if your friend files bankruptcy the timeshare company can pursue you to collect the debt. If you file bankruptcy, they can not collect the debt. Otherwise you will have to find a way to pay them.

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Answered on Jan 15th, 2013 at 1:58 PM
The short answer is that yes, you will remain obligated for the debt (and the maintenance fees as long as you are an owner).

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Answered on Jan 15th, 2013 at 1:56 PM
If your friend discharges his liability for this debt in bankruptcy, you will remain responsible for it unless you file your own bankruptcy case.

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Answered on Jan 15th, 2013 at 1:56 PM
The short answer is yes, you still owe the debt even if your co-owner does not because of his bankruptcy. Bankruptcy can discharge debts such as loans made to purchase real estate, but the trust deed holder still has the right to foreclose on the property if payments aren't made. If your timeshare mortgage payments are not made in full, whether by you, your co-owner, or both, you can expect to see a notice of default and eventually foreclosure and sale of the property. (Maybe you already received a notice of default. Is that what you mean by "in collections"?) You will need to work this out with your co-owner, and determine whether you want to keep paying for the timeshare, let it go in foreclosure, sell it to someone else, buy out your friend's share, or otherwise handle it. If you cannot afford the timeshare and have other debts, an appointment with a local bankruptcy attorney might help you decide how to handle your affairs.

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Answered on Jan 15th, 2013 at 1:56 PM
Your friend's bankruptcy will not affect your legal obligation to pay the debt. Lots of people that co-sign a debt for someone else find that having made this decision ruins their credit and their friendship. It can be an expensive lesson to learn.

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