§ 31.8     Guaranties and Other Secondary Liabilities
Cite as:    Keith M. Lundin, Lundin On Chapter 13, § 31.8, at ¶ ____, LundinOnChapter13.com (last visited __________).
[1]

Debtors often have guaranteed or co-signed the obligations of others. Secondary obligations arise at work and within the family—the debtor will co-sign the note of a coworker at the credit union, or the debtor and other family members will be jointly obligated for a personal property purchase. Sometimes these co-obligations are remote in time and are not recalled by the debtor as debts. Secondary liabilities may have significant effects on the debtor’s eligibility for Chapter 131 and ability to perform a plan.

[2]

Even debtors who are not engaged in business occasionally have delivered a broad guaranty to a bank. Especially when the debtor was a partner, officer or director in a business that failed, the debtor may have guaranteed obligations of the defunct business, and the nature and extent of those guaranties must be determined to prepare the schedules and plan.


 

1  See §§ 7.6 [ Partnership and Corporate Debts and Assets May Affect Eligibility ] § 10.6  Partnership and Corporate Debts and Assets May Impact Eligibility, 15.2 [ Is Partnership Debt Contingent? ] § 15.2  Is Partnership Debt Contingent?, 15.3 [ Guaranties ] § 15.3  Are Guaranties Contingent? and 15.6 [ Claims through and against Debtor’s Corporation ] § 15.6  Are Claims through and against Debtor’s Corporation Contingent?.