A surety can assert his or her own bankruptcy as a defense to avoid liability on a principal debtor's obligation.

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A surety can assert their own bankruptcy as a defense under the Bankruptcy Code (11 U.S.C. § 101 et seq.). This defense can release the surety from liability on the principal debtor's obligation. However, this defense is not available if the surety waived their right to assert bankruptcy as a defense in their agreement with the creditor.

A Surety Can Assert His or Her Own Bankruptcy as a Defense