Bankruptcy: The Difference Between a Joint Debtor and a Co-Debtor

Bankruptcy filers are required to list all of their debts in their schedules. In addition to the creditors they must also disclose who else is liable for the debt. A person who shares responsibility for a debt with a debtor in a bankruptcy case is called a co-debtor. Co-debtors receive some protections under Chapter 13 bankruptcy. Collateral securing loans for which the co-debtor is also liable is protected by the automatic stay even though the co-debtor didn’t file bankruptcy. Co-debtors are listed on Schedule H of the bankruptcy schedules.

A joint debtor is someone who files bankruptcy with another party. This is usually a filer’s spouse. Joint debtors receive automatic stay protection because they are a party to the bankruptcy case. Joint debtors may also be co-debtors, in that they may also be liable for the debts listed in the bankruptcy, but this is not always the case. If a debt was not incurred by one of the bankruptcy filers, then they are usually a joint debtor in the bankruptcy case but not a co-debtor responsible for that specific debt. However, when filing a Chapter 13 case, the household income is used to determine the ability to repay debts listed in the bankruptcy case. As a result, even though a joint debtor may not be a co-debtor their future income may be used to pay off debts for which they are not personally liable.