Will only my husband be responsible for the property after bankruptcy? 8 Answers as of March 23, 2011

My husbands exwife has title to the home they had during marriage. They are both signers on the mortgage. She has fallen behind on the payments and is now filing chapter 13. What do we need to do to protect us, if anything. I feel that she is doing this and then will file chapter 7 and he will be solely responsible for the home (even though he is not on title) Can this be true?

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

Free Case Evaluation by a Local Lawyer: Click here
Mercado & Hartung, PLLC
Mercado & Hartung, PLLC | Christopher J. Mercado
A Ch 13 filing can force the repayment of delinquent mortgage payments. From the date of filing, the ex wife must begin paying the ongoing mortgage payments as they become due directly to the mortgage company and outside of the plan. The mortgage company is entitled to recover its arrears, late fees, costs of the default and reasonable attorney fees. These amounts are repaid without interest.
Answer Applies to: Washington
Replied: 3/23/2011
Law Office of Harry L Styron
Law Office of Harry L Styron | Harry L Styron
It can be true, although if it is he probably will be entitled to reopen the dissolution proceeding to reallocate assets and obligations in view of her action. What should have happened in the dissolution action is that if she was going to take the house then she should have been required to refinance it to take his name off the mortgage.
Answer Applies to: California
Replied: 3/23/2011
Burnham & Associates
Burnham & Associates | Stephanie K. Burnham
You are correct to be concerned. Even if your Husband is not on the deed to the property, you have indicated that he is a signer on the mortgage. In the event his ex-wife files for a Chapter 7 Bankruptcy, discharges her obligations on the mortgage, and then does not pay, the mortgage company will likely seek payments from your Husband. There are some special considerations and it would be a good idea for your husband to meet with an attorney to discuss his options and determine what steps, if any, he may need to consider.
Answer Applies to: New Hampshire
Replied: 3/23/2011
The Law Office of John T. MacDonald Jr., PLLC
The Law Office of John T. MacDonald Jr., PLLC | John MacDonald Jr.
First of all, your husband should consult an attorney immediately. Secondly, if his name is on the mortgage then he will be responsible should the ex-wife default. He should of had his name removed from the mortgage loan during the divorce. If you need any help please have him contact me.
Answer Applies to: Michigan
Replied: 3/23/2011
Ferguson & Ferguson
Ferguson & Ferguson | Randy W. Ferguson
If she defaults on the mortgage, and goes bankrupt, he will be resp. for the loan.
Answer Applies to: Alabama
Replied: 3/23/2011
    Law Office of L. Paul Zahn
    Law Office of L. Paul Zahn | Paul Zahn
    The issue is that by not making the payments, your husband's ex-wife has damaged his credit already. You would need to consult the marital settlement agreement (or other divorce documents) to determine what rights your husband has to the home. Generally, I recommend taking over the property, but that might not be possible. You cannot, however, file a chapter 7 after a chapter 13 discharge. If she does file a chapter 7, however, and relinquishes her right to the home, the only protection that your husband has is to take over payments and take possession of the home (or file for chapter 7 bankruptcy himself to absolve him of this burden). I practice both family law and bankruptcy, so I can help with these issues. Please contact me for a free consultation.
    Answer Applies to: California
    Replied: 3/22/2011
    Carballo Law Offices
    Carballo Law Offices | Tony E. Carballo
    If there is only one loan on the home then the foreclosure should end any liability that your husband or his ex-wife have with regard to the house. If there is a second loan then your husband will owe the second loan along with his ex-wife. There might be liability for cancellation of debt owed by your husband if the house is sold at a foreclosure sale for less than the amount owed. You need to consult with a tax attorney or other tax expert on this possibility. The ex-wife can discharge any liability she might have with respect to a second loan on the house if the bank forecloses. However, if only one loan then neither she nor your husband will have any remaining liability to the bank for the deficiency (the difference between the amount the house sells for and the balance of the mortgage).
    Answer Applies to: California
    Replied: 3/22/2011
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    Yes, if he signed the loan docs he remains liable. While she is in Chapter 13 the lender will not bother him because there is a "co-debtor stay." In some states, such as California, the purchase money loan on a home is a "non-recourse loan." If that is the case, the lender can not come after your husband. All the lender can do is foreclose on the home. It will however be a hit on his credit.
    Answer Applies to: California
    Replied: 3/22/2011
Click to View More Answers: