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Co-Debtor Stay in Chapter 13
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Scenario 4: The debtor's Chapter 13 plan proposes to pay the full amount of the joint debt.
The co-debtor stay remains in effect for the duration of the Chapter 13 plan as long as the filer continues to make the plan payments.
Scenario 1: A co-debtor is harassed by creditors after the other debtor files for Chapter 13 bankruptcy.
The co-debtor may be protected under the co-debtor stay, which prohibits creditors from pursuing collection actions against the co-debtor for consumer debts.
Scenario 2: A creditor attempts to collect a joint debt by filing a lawsuit against the co-debtor.
The co-debtor stay may prevent the creditor from continuing the lawsuit, ensuring legal protection for the co-debtor while the Chapter 13 case is active.
Scenario 3: A co-debtor wants to know if the co-debtor stay will protect their own property from seizure.
The co-debtor stay extends to the co-debtor's property, preventing its seizure or foreclosure to pay off the shared debt during the Chapter 13 case.
Scenario 5: A debtor is dismissed from Chapter 13 bankruptcy before completing the payment plan.
Upon dismissal, the co-debtor stay is lifted, and creditors can resume collection actions against the co-debtor for unresolved debts.
Scenario 9: A co-debtor disagrees with a creditor's motion to lift the co-debtor stay.
The co-debtor has the right to contest the motion in bankruptcy court and present evidence why the stay should remain in effect.
Scenario 7: A creditor claims an exception to the co-debtor stay due to the co-debtor's bad faith or misrepresentation.
Creditors may petition the court to lift the co-debtor stay if fraud or misrepresentation by the co-debtor can be proven, potentially leading to resumed collection efforts.
Scenario 8: The Chapter 13 debtor fails to make timely payments under the repayment plan.
Failure to make timely payments may lead to the lifting of the co-debtor stay, allowing creditors to continue pursuing the co-debtor for the debt.
Scenario 6: A co-debtor is unsure if the co-debtor stay will protect them if they did not file for bankruptcy.
The co-debtor stay provides protection even if the co-debtor has not filed for bankruptcy, as the stay is automatically applied upon the associated debtor's Chapter 13 filing.
Scenario 10: A co-debtor is concerned about the impact of the co-debtor stay on their credit report.
The co-debtor stay does not directly affect the co-debtor’s credit report; however, the associated debtor's Chapter 13 case may indirectly impact the co-debtor's credit if the debt is reported as delinquent.
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