QUESTION
Can my co-debtor keep our condo if I declare chapter 7 bankruptcy, and we don't reaffirm the debt?
Asked on Mar 03rd, 2011 on Bankruptcy - Tennessee
More details to this question:
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!!
4 ANSWERS
Consumer Bankruptcy Attorney serving Los Angeles, CA
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Orantes Law Firm
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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.
Answered on Mar 07th, 2011 at 12:40 PM
Alternative Dispute Resolution Attorney serving Ventura, CA
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Zahn Law Office
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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.
Answered on Mar 06th, 2011 at 6:21 PM
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.
Answered on Mar 06th, 2011 at 6:11 PM
William C. Gosnell
Yes.
Answered on Mar 06th, 2011 at 6:02 PM