QUESTION
If two names are on mortgage, if one files for bankruptcy can the other lose the home?
Asked on Jan 14th, 2012 on Bankruptcy - Oklahoma
More details to this question:
Four years ago my son purchased a home with a girlfriend. In no time (less than 1 yr) she was caught cheating and she left. He did seek legal advice and was told to have her sign a paper that she gives up all interest in the home- he did this. We thought she was out of his life. Yesterday she texted him (we don't know if she was sober) and said he was going to lose his home because she filed for bankruptcy. If two names are on mortgage, if one files for bankruptcy can the other lose the home?
9 ANSWERS
Business Bankruptcy Attorney serving Raleigh, NC
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J.M. Cook, P.A.
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Probably not. She quit claimed his interest in the home. (I hope he registered the quit claim with the register of deeds). Even if not, the trustee would need to find equity in the home over and above the mortgage and your son's half interest (tough thing in the current economy).
Answered on Jan 31st, 2012 at 1:01 PM
Bankruptcy Attorney serving Concord, CA
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William Rubendall Attorney at Law
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A co-owned property can be sold by the bankruptcy trustee if there is equity owned by the estate.
Answered on Jan 28th, 2012 at 10:37 AM
No. Her bankruptcy will discharge her obligation on the debt, but not your son's. As long as your son is current with the payments there is nothing for him to worry about. Your son should consult with a real estate attorney to ensure all of his interests in the property are protected (ownership, financing, homestead, etc.).
Answered on Jan 27th, 2012 at 1:22 PM
Chapter 7 Bankruptcy Attorney serving Milwaukee, WI
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Law Offices of Deborah A. Stencel
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As long as your son remains current on the mortgage payments, he will not lose the home. It sounds to me like she is being vindictive or misunderstood the advice of her attorney. When a person files a bankruptcy, it relieves that person of their eligible debts. In this case, the ex will be relieved of her personal responsibility for the loan. Your son still has personal responsibility for the loan and he is not involved in her bankruptcy. All he has to do is comply with the terms of the mortgage and he will be fine.
Answered on Jan 27th, 2012 at 1:17 PM
Bankruptcy Attorney serving Hampton, VA
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Haven Law Group, P.C.
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If there is significant equity in the home, a ch. 7 trustee would sell the home only if the she still had a legal or equitable interest in the home. However, he would get paid his half of the equity after the sale. If she signed a quit claim deed more than 2 years ago and has not paid anything on the house since, the trustee could not touch the house.
Answered on Jan 27th, 2012 at 11:53 AM
Bankruptcy Attorney serving Hayward, CA
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Carballo Law Offices
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The bank cannot take a house if the mortgage is current. The credit report will show the mortgage involved in a bankruptcy case by a joint debtor on the mortgage and the bank will stop sending statements during the bankruptcy but if payments are made regularly then no problem with the house. It will just be an inconvenience for about four months.
Answered on Jan 27th, 2012 at 11:52 AM
Not if they keep paying the mortgage.
Answered on Jan 27th, 2012 at 11:16 AM
Glen Edward Ashman
Possibly, depending on what was signed and filed. He should see a lawyer.
Answered on Jan 27th, 2012 at 10:45 AM
No, as long as the mortgage payments stay current he will keep the house. The bankruptcy will eliminate the filing debtor's obligation to pay the mortgage but not the obligation of the non-filing co-owner/debtor.
Answered on Jan 26th, 2012 at 7:20 PM