This video is about the co-debtor stay in Chapter 13 of the bankruptcy code. It means that if you’re a consumer, typically it means when you’re married and your spouse doesn’t file, not only do you get an automatic stay, but your non-filing co debtor, usually a spouse in a joint obligation, also gets a protection from the federal bankruptcy laws.

Frequently, even typically, a secured creditor will find themselves in a position to request the bankruptcy court to allow them to foreclose on real estate, seize a vehicle or some other way to realize their collateral so they file a motion for relief from the automatic stay. Sometimes, the creditor’s lawyer forgets to also file for relief from the co debtor stay in a Chapter 13 case. Creditors need to be aware that when there’s a Chapter 13 case, there might be a co debtor stay.

The worst-case scenario for the creditor is the lawyer doesn’t remember that there’s a co debtor stay and they get relief from the automatic bankruptcy stay but they never get relief from the co debtor stay. If they repossess the car or they take some other action they’re in knowing, willful violation of the co debtor stay. The federal court will protect the co debtor stay just as powerfully as it will protect the automatic stay that will open that creditor up for damages and punitive damages in the form of a sanction.