Should I Pay Off a Loan I Cosigned For And Not Let It Go Into Bankruptcy. – Victoria


“Dear Steve,

I co-signed a loan through a credit card company for a friend to open a business. I have already renegotiated the rate down to 4%. I did it in my friend’s name. She has other debts related to the business and wants to go bankrupt. I do not want my credit affected by bankruptcy.

Should I put the debt totally in my name to keep it out of the bankruptcy proceedings?

She is committed to paying me back. I trust her completely. She will pay this debt back or die trying.

We are committed to bankruptcy for her but want to keep me as far away from the problem as possible.

Should I ask the lender to take her name off the debt?


Dear Victoria,

The carnage from cosigned loans is vast and deep but to protect your credit, you’ve got the right idea.

You could either ask the lender to rewrite the loan in your name only, could do a balance transfer to another credit card, or you could look into a solution like and make an application for a lower rate peer-to-peer loan to pay off the debt in your name.

Ultimately, to protect your credit you need to assume control over this cosigned debt and let your friend pay you back. Do not let your friend make the payments directly, you need to stay involved to make sure this gets paid on a timely basis to keep your credit report and credit score in good shape.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

Steve Rhode

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