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Elizabeth Prentice
Elizabeth Prentice, Attorney
Category: Bankruptcy Law
Satisfied Customers: 174
Experience:  Managing Attorney for one of the largest consumer bankruptcy firms in America.
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1) If 2 parties are responsible for a debt, and only 1 of

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1) If 2 parties are responsible for a debt, and only 1 of them files CHAPTER 7 bankruptcy, may a creditor continue collection of the debt from the non-filing party while the filing party is still in bankruptcy? Or does the creditor have to wait until the filing party is discharged in bankruptcy to attempt collection from the non-filing party? THIS QUESTION PERTAINS TO DEBTORS IN A NON-COMMUNITY BANKRUPTCY STATE.

2) Are there any specific bankruptcy rules/laws that address this issue?
I am a bankruptcy attorney and I would be happy to assist you! The law concerning debt collection varies from state to state, depending on your state's specific laws/statutes.

Generally, if a person files Chapter 7 bankruptcy in a non-community property state, they may only attempt recover from someone else if that person was a co-signer or listed as a responsible party on the loan or debt. For example) If a person took out a car loan and their parent's co-signed, then the loan company may attempt to obtain the full amount of the debt from the co-signer parent. They do not have to wait until the other party is discharged, since there is no bankruptcy stay pending. If the debt is not secured (ex-a car or house loan), and is merely unsecured, such as a credit card, then that company may only attempt collection if the other person's name is XXXXX XXXXX the card, and if they attempt collection within a certain time frame. State time limits vary, but it is generally permissible for a lender or creditor to sue the other person within 4 to 6 years to recover the debt, depending on the state.

Another scenario many are concerned about is whether a spouse can be sued in a non-community property state, if one spouse files bankruptcy. As mentioned previously, the creditor may only attempt recover if that spouse is listed on the debt or if they were a co-signer. A good way to check is to have a spouse pull their own credit reports. In a non-community property state, a spouse is not responsible for the debt of the debtor.

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Customer: replied 3 years ago.

Your answer is more complete than most of the answers I have received. I would like to clarify your following statement: If the debt is not secured (ex-a car or house loan), and is merely unsecured, such as a credit card, then that company may only attempt collection if the other person's name is XXXXX XXXXX the card, and if they attempt collection within a certain time frame. State time limits vary, but it is generally permissible for a lender or creditor to sue the other person within 4 to 6 years to recover the debt, depending on the state.


For clarification: assuming the statute of limitations has not expired, a creditor may attempt collection from a co-maker who has not filed Chapter 7 bankruptcy, while the filer's Chapter 7 bankruptcy case is still "open". (non-community property state). And this is because there is no stay pending.

Yes, that is correct, as previously stated in my answer.
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