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Can I file for bankruptcy if I'm on the deed of trust but not the note

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rgvlife999

Junior Member
Additional info

I am on the deed of trust to a home but only my husband is on the note. We are separated but not yet divorced. I only recently learned of the foreclosure on the home. Can I file for bankruptcy to give me time to explore all options and better prepare to have to move out if other options are not available?
 

FlyingRon

Senior Member
You can file for bankruptcy and it will likely stay the foreclosure proceedings, but if you're only doing this to somehow try to block the foreclosure, the bank is not going to have any problem getting the stay lifted.


Why do you want to file for bankruptcy? This debt does not affect you as you appear not to be responsible for it. The worst thing that is going to happen is that you lose your interest in the property. Bankruptcy (on your part) isn't going to change that at all.
 

latigo

Senior Member
I am on the deed of trust to a home but only my husband is on the note. (?). We are separated but not yet divorced. I only recently learned of the foreclosure on the home. Can I file for bankruptcy to give me time to explore all options and better prepare to have to move out if other options are not available?
You can't be named as a Trustor on a Deed of Trust WITHOUT being obligated to the Beneficiary for the indebtedness which the instrument secures! The "note", as you call it, is normally, but not necessarily, incorporated in the body of the instrument itself!

Also, before you file for debtor's relief you would be well advised to consult with your attorney. If a divorce comes down in which you are held even partly responsible on the deed of trust "note", problems could arise in avoiding the debt with respect to your obligation to the future ex.
 

FlyingRon

Senior Member
i'm sorry, Latigo, but that's not strictly true. Yes it's uncommon for the situation to occur, but it can happen. All the deed of trust says that if you don't fulfill the obligation, the trustee may take steps against the secured property to satisfy the obligation to the beneficiary. The deed of trust itself is NOT that obligation and I've certainly not seen any in the states I've owned property in (admittedly not Texas) where the note is part of the deed of trust. The note is a distinct document stating the terms under which the money is to be repaid. The trustors need to be all the owners of the property but there is only a coincidental relationship between them and the borrowers on the note.
 

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