How are cosigned or guaranteed debts handled in Chapter 13?
If a cosigned or guaranteed consumer debt is being paid in full under a Chapter 13 Plan, the creditor may not collect the debts from the cosigner or guarantor. However, if a consumer debt is not being paid in full under the Plan, the creditor may collect the unpaid portion of the debt from the cosigner or guarantor. A consumer debt is a non-business debt. Creditors may collect business debts from cosigners or guarantors even if the debts are to be paid in full under the debtor’s Plan.
