QUESTION
If I file Chapter 7, will my son also be obligated to file since we are joint owners of the home?
Asked on Apr 25th, 2014 on Bankruptcy - California
More details to this question:
My son and I are joint owners of my home but he has his own residence. I have a line of credit loan using my home as collateral. His name is also on the loan.
10 ANSWERS
Bankruptcy Law Attorney serving Austin, TX
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Law Office of Susan G. Taylor
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Yes, to escape liability.
Answered on May 02nd, 2014 at 3:51 AM
Unfortunately, if he is also on the loans, yes.
Answered on Apr 28th, 2014 at 5:18 PM
Commercial & Bankruptcy Law Attorney serving Powell, OH
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Ronald K. Nims
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Under no circumstances does one person filing bankruptcy ever require a bankruptcy by a second person - even husband and wife. Now a lot of times, it's beneficial for both to file but never required. If both you and he signed on the loan, and you file bankruptcy, then the loan will become his sole obligation.
Answered on Apr 25th, 2014 at 7:47 PM
A secured loan consists of a promissory note and a lien against the property securing it. Your creditor could foreclose on your house AND sue your son for collection on the note, since his name on the loan means he is equally responsible for payment if you default. Therefore, your son could be forced into bankruptcy if he is unable to pay the debt on your property. Practically speaking, however, he could probably settle for any deficiency remaining after your house is sold by the lienholder. If the selling price is high enough, there might not be a deficiency and your son could be unharmed financially. Or he might be able to borrow enough money against his own home to pay the deficiency and you could repay him when you are able. The key question is how much equity you really have in your home.
Answered on Apr 25th, 2014 at 7:47 PM
Bankruptcy Attorney serving Livonia, MI
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Charles J. Schneider, P.C.
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Yes he will still be liable on the loan.
Answered on Apr 25th, 2014 at 4:31 PM
You haven't provided the kind of information needed to answer this question. Are you planning on keeping the real estate? If so, as long as your payments on the mortgage are current, your son won't face any liability problem for this debt. If you are planning on surrendering this real estate, the way you prepare for this event could hurt your son. I hope you will discuss this issue with the attorney you retain to represent you on your bankruptcy.
Answered on Apr 25th, 2014 at 4:28 PM
Bankruptcy Law Attorney serving Livingston, NJ
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Law Office of Stuart M. Nachbar, P.C.
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Yes, he would, as he would be liable for the full amount.
Answered on Apr 25th, 2014 at 12:59 PM
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You both are equally responsible for the loan. He will still be on the contract after your bankruptcy.
Answered on Apr 25th, 2014 at 12:53 PM
bankruptcy Attorney serving Paul, ID
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Paul N. J. Ross Law, PLLC
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No. Your son will remain liable on the credit loan against the home. But since it is secured, you will have to make payments on it anyway to keep your home.
Answered on Apr 25th, 2014 at 12:51 PM
Bankruptcy Attorney serving Walnut Creek, CA
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Alan E. Ramos Law Offices
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Most likely, no; however, you should see an attorney to review all of the facts of your case to make sure that you are taking the correct action.
Answered on Apr 25th, 2014 at 12:51 PM