When two or more people are liable on the same debt, they are called co-debtors.
Frequently misunderstood is the fact that just because one person files bankruptcy to get protection from a creditor, if there’s a co-debtor on the obligation who hasn’t filed bankruptcy that creditor can still seize that other person’s property or wages.
This becomes a special problem in divorce cases, where one spouse will agree to pay credit card debts or a mortgage for which the other spouse is also responsible. It’s important to remember that this agreement between the spouses is not binding on the creditor. As a result, if the paying spouse files bankruptcy the creditor can still pursue the spouse who thought that they were in the clear under the divorce or separation agreement.