Can my co-debtor keep our condo if I declare chapter 7 bankruptcy, and we don't reaffirm the debt? 13 Answers as of March 08, 2011

I own a condo with my boyfriend. We have a mortgage and a home equity line of credit together. I just filed for chapter 7 bankruptcy. My boyfriend wants to keep the condo. The value of the condo is $100K less than what we owe on the loans. We are current on all payments, and never have been late in the 5 years we've owned it together. But due to the value of the condo being so low... we do not want to reaffirm the debt. We don't want to be liable for the additional $100K difference if something would happen to either of us in the future, making us unable to pay bills. Since my boyfriend's credit is perfect, and he's not filing for bankruptcy... can he keep the condo, even if I were to request the debt be discharged for me? Please let me know. I am filing pro se so I need help! Thanks!!

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David R. Fondren, Attorney at Law
David R. Fondren, Attorney at Law | David R. Fondren
Since your boyfriend is not in bankruptcy, your actions will not affect him and his liability on the debt. If you do not reaffirm, you will no longer be personally liable for the debt. He is liable and has to make payments or come up with an alternative agreeable to the lender or file his own bankruptcy. If you do reaffirm, this could become part of your fresh start. As he makes payments they will be reported on your credit report again. But if he stops for any reason, they will come after you.
Answer Applies to: Missouri
Replied: 3/8/2011
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
First, there is NO requirement under the bankruptcy code to reaffirm debt on real property. Second, good news.... he can keep the condo by continuing to make the payments.
Answer Applies to: California
Replied: 3/8/2011
Rhonda R. Werner Schultz, PL
Rhonda R. Werner Schultz, PL | Rhonda R. Werner Schultz
Since you are filing bankruptcy you will surrender the condo to the creditor and they will not be able to collect any balance owed from you if you do not reaffirm the debt. The creditor will still be able to collect the debt from your co-debtor since he has not filed bankruptcy and he will continue to be liable for the debt. Therefore, he can keep the condo, but he will have to pay the mortgage to avoid foreclosure. If he does not pay the mortgage, the mortgage company will foreclose on the debt and sue him on the balance due.
Answer Applies to: Wisconsin
Replied: 3/8/2011
Law Office of Harry L Styron
Law Office of Harry L Styron | Harry L Styron
This isn't really a reaffirmation question. Your interest in the condo is exempt to the extent of $50,000 equity, and since there is no equity, your interest is entirely exempt, so the bankruptcy trustee will not be trying to sell it. As long as the payments are being made on the debts secured by the condo, there shouldn't be a problem with keeping it without your reaffirming it.
Answer Applies to: California
Replied: 3/8/2011
Ursula G. Barrios Law
Ursula G. Barrios Law | Guillermo Machado
As long as the bank continues to accept payments, there should be no need for a reaffirmation, and you should be able to keep condo.
Answer Applies to: California
Replied: 3/7/2011
    The Orantes Law Firm
    The Orantes Law Firm | Giovanni Orantes
    He can keep the condo, but must continue making payments. Your Chapter 7 will discharge your debt for it regardless of what he does with his liability. If he cannot keep up with the payments in the future, he may need to file his own bankruptcy case, but it doesn't matter to you anymore. If you're not going to continue chipping into the payments, you should quitclaim your interest to him out of fairness and to avoid the hassle down the line of his having to file a lawsuit against you to quiet title that is, for a court to declare that he is the 100% owner. However, you may want to explore a Chapter 13 case if the line of credit is big enough as it might be elimited in a Chapter 13 case.
    Answer Applies to: California
    Replied: 3/7/2011
    Cohen & Kendziorra, P.A.
    Cohen & Kendziorra, P.A. | Robert S. Cohen
    The mortgage note is included in your bankruptcy so if you do not reaffirm the note, then if it goes into foreclosure you are protected. Your boyfriend did not file bankruptcy so he doesn't reaffirm the note and as long as he make the mortgage payments, then he keeps the condo. If he stops paying the mortgage, then the condo will go into foreclosure and he may be held responsible for any deficiency claim but you will not since you included the note in your bankruptcy and did not reaffirm.
    Answer Applies to: Florida
    Replied: 3/7/2011
    Ferguson & Ferguson
    Ferguson & Ferguson | Randy W. Ferguson
    Have you talked to the mortgage company about the debt. Since you are not behind on the debt, they may be willing to transfer it over to him. If you file bankruptcy on the condo, they are going to go after him if the bills are not paid anyway. Try with the mortgage company first.
    Answer Applies to: Alabama
    Replied: 3/6/2011
    Law Office of L. Paul Zahn
    Law Office of L. Paul Zahn | Paul Zahn
    If you are both on the loan, your filing will not eliminate his obligation to the debt. If the property is not reaffirmed, then it will possibly be sold through the trustee sale, but the note holder can still come after your boyfriend to collect the difference between the sale price and the loan. I would suggest you speak with a bankruptcy attorney and that your boyfriend does the same.
    Answer Applies to: California
    Replied: 3/6/2011
    Diefer Law Group, P.C.
    Diefer Law Group, P.C. | Abel Fernandez
    Yes, you can keep the condo. As long as you make payments, the creditor will let you keep it.
    Answer Applies to: California
    Replied: 3/6/2011
    William C. Gosnell, Attorney at Law
    William C. Gosnell, Attorney at Law | William C. Gosnell
    Yes.
    Answer Applies to: Tennessee
    Replied: 3/6/2011
    Indianapolis Bankruptcy Law Office of Eric C. Lewis
    Indianapolis Bankruptcy Law Office of Eric C. Lewis | Eric Lewis
    Not reaffirming on that debt is a wise decision. As long as the payments are timely made, your bankruptcy will not infringe your boyfriend's ability to keep the note in good standing and keep the condo.
    Answer Applies to: Indiana
    Replied: 3/6/2011
    The Law Office of Mark J. Markus
    The Law Office of Mark J. Markus | Mark Markus
    Yes, your boyfriend can keep the condo and so can you, as long as the payments are made on time pursuant to your Notes and Deeds of Trust. The Trustee in your bankruptcy isn't going to administer an asset that has no equity, so no title will change. However, since your boyfriend is not filing bankruptcy, he will remain liable for any deficiency in the event the payments are defaulted and the property sold at foreclosure.
    Answer Applies to: California
    Replied: 3/6/2011
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