Is it really true my mother's money is safe and can't be touched if she is a cosigner on my bankruptcy? 12 Answers as of August 22, 2014

I filed chapter 7 bankruptcy. I am discharged. I did not reaffirm with my mortgage. My 95 year old mother is a co-signer, but is no longer coherent or aware, all her money was put in a trust and cannot be touched until she passes and the money goes to her daughters, (me, included). An attorney told me my mother's money is safe. I cannot afford the house payment anymore but have paid if full with no late as of today. If I all of a sudden stop paying, yes I know they can foreclose. Is it possible I might have maybe 4-6 months before I am really kicked out? I want to move, but really am not ready for 6 months but I would need to save money to move across the states, that is why I am contemplating not paying. Any suggestions?

Ask a Local Attorney. 100% Anonymous. Free Answers.

Free Case Evaluation by a Local Lawyer: Click here
Barnhart Law Office
Barnhart Law Office | Bruce C Barnhart
Your bankruptcy discharge eliminated your personal liability to the mortgage company, it did not eliminate the co-signer's liability. If the house is foreclosed for less that the balance of the mortgage note, the mortgage company could sue the co-signer for the deficiency. If the mortgage company obtains a judgment against the co-signer, the mortgage company may garnish wages, bank accounts, and place a lien on the co-signer's real estate. Your mother's trust may be protected from such collection efforts. Mortgage companies must follow Nebraska law to successfully foreclose real estate. Real estate can be foreclosed in as little as 68 days. Often the foreclosure and eviction takes significantly longer than 68 days.
Answer Applies to: Nebraska
Replied: 8/22/2014
As you say your debt has been discharged so that you can walk away from the house but your mother did not file bankruptcy. If she co-signed the mortgage she is responsible to pay if there is a deficiency sale in a foreclosure. If you decide to give up the house do not pay the monthly payments. Depending upon state law you should have at least 6 months before you would have to give up possession of the house. At some point it would probably be best for you mother to file for bankruptcy if that is possible for her.
Answer Applies to: Minnesota
Replied: 8/22/2014
Dickson Law Group, LLC
Dickson Law Group, LLC | John P. Dickson
At a bare minimum you have 9 months after missing a payment before you can be evicted from a foreclosed home. Illinois Legal Aid has a good summary of this timeline on their website:
Answer Applies to: Illinois
Replied: 8/22/2014
Law Offices of Linda Rose Fessler | Linda Fessler
I think you can stall it for at least 6 months. If you ask for a loan modification, you can stall it for a longer period. If you sue the bank, even longer.
Answer Applies to: California
Replied: 8/22/2014
Ronald K. Nims LLC | Ronald K. Nims
Did your attorney review the trust where your grandmother put her money? If she/he didn't, 1st, get a new attorney - this one is incompetent and 2nd, have an attorney review the trust and the circumstances of it's creation. It's possible that funds gifted to a trust aren't subject to the claims of grandma's creditors, including the lender of your mortgage, but it isn't automatic. There are two possible problems, 1st, if grandma gave away all her assets in the past 4 years (4 years in Ohio, different states might have different limits), the creditor could sue the trust and get the funds. 2nd, if grandma is a beneficiary of the trust, then the creditor might be able to get the funds. In Ohio, a foreclosure takes at least nine months after it's filed and the bank isn't going to file until you've missed several payments. Some states are much faster than this, so you need to speak with an attorney familiar with the process in your state.
Answer Applies to: Ohio
Replied: 8/21/2014
    As long as you do not receive an inheritance from your mother within 6 months of your bankruptcy filing date your mother's money is safe. As long as the money borrowed on your home which your mother cosigned on was used to purchase the home, she has no personal liability. It will hurt her credit report, but at this point it is of no consequence to her. If you default on your mortgage the lender normally waits for 2 to 3 months or more before recording a notice of default. After the notice of default is recorded you will have 3 months and 21 days before they can sell the home at auction sale. You might want to explore a short sale if you owe more on the property than its current value.
    Answer Applies to: California
    Replied: 8/21/2014
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    Why don't you believe your lawyer? I can't answer this as I have not seen the trust documents. The trust documents hold the answer. It could be quite awhile before you are kicked out after ceasing payments.
    Answer Applies to: California
    Replied: 8/21/2014
    The Law Office of Darren Aronow, PC
    The Law Office of Darren Aronow, PC | Darren Aronow
    Most areas in NY can take up to 2 years to foreclose. Six months should be a walk in the park.
    Answer Applies to: New York
    Replied: 8/21/2014
    A Fresh Start
    A Fresh Start | Dorothy G Bunce
    It would have helped me if you had mentioned WHEN THE TRUST WAS CREATED & when her money was put into the trust because there are several laws that deal with the issue of moving money into trusts to avoid paying debts. If you think you will be losing the property through a foreclosure, there are some smart strategies to consider to avoid a sale of your house at a public auction, where it will be sold to the highest cash bidder, but for far less than retail value. I would suggest talking with your bankruptcy attorney about what these strategies are. Oh, BTW, in many states, there are anti-deficiency laws that do not allow a mortgage company to sue if they lose money as a result of a foreclosure. In Nevada, the first mortgage lender only has 6 months to file suit, and it is very unusual for them to do this.
    Answer Applies to: Nevada
    Replied: 8/21/2014
    Musilli Brennan Associates PLLC
    Musilli Brennan Associates PLLC | John F Brennan
    You have received advise from an attorney who is familiar with the facts and circumstances. You cannot receive such an informed opinion in this forum. IF YOU want a second informed opinion your only choice is to engage an attorney, provide all of the details and documents.
    Answer Applies to: Michigan
    Replied: 8/21/2014
    Thomas Vogele & Associates, APC | Thomas A. Vogele
    If you received a discharge and did not reaffirm the mortgage, you have no obligation on the debt. However, the bank's lien survives the discharge and it may foreclose if you stop paying. Rather than stopping payments, I suggest you contact the bank and explain your situation and explore your options. Many lenders will do "cash for keys" that will provide you with money to move and start over. If you decide not to do that, you can stop paying the mortgage and eventually the bank will foreclose. If that is your chosen course off action, SAVE THE MONEY YOU OTHERWISE WOULD HAVE PAID THE BANK!
    Answer Applies to: California
    Replied: 8/21/2014
    Goldsmith & Guymon
    Goldsmith & Guymon | Marjorie Guymon
    Your mother is liable for the mortgage. The question is whether the mortgage company can collect against her. If her trust was established more than 6 years ago and it is an irrevocable trust them the assets are safe. You may want to try a short sale to avoid potential liability.
    Answer Applies to: Nevada
    Replied: 8/21/2014
Click to View More Answers:
12 3 Free Legal QuestionsConnect with a local attorney