Divorce and wifes bankruptcy

[meetthecreeper]

What is the name of your state (only U.S. law)? Indiana

Dont know if I should be asking this here or in the bankruptcy section because it has a broad subject of legal issues going on so if the administrator feels that this needs to be moved please do so.

In October of 2011 I filed for divorce from my X which was then final in January 2012. In the divorce papers my X was taking the credit cards and debts in her name and I was taking the credit cards and debts in my name. I was also taking the mortgage of the house which I would be assuming and she would sign a quit claim deed, which she had done, deeding the house to me. I would then be the only one obligated to the mortgage as she had wanted that way.

She had filed for bankruptcy I believe in December or January and it had affected my credit because I was a signer on one of her accounts. I since had rectified that situation and my credit is in good standing.

No comes the part I have issue with. I am unable to assume the mortgage on the house, nor am I able to refinance because she put the house in her bankruptcy. I also cannot remove her from the mortgage. I am staying current on the mortgage with no assistance from her whatsoever. I have talked to the mortgage company, her bankruptcy attorney, my divorce attorney, the trustee for the bankruptcy, and the judge who handled her bankruptcy. They have all told me that nothing can be done and hire a lawyer. She has a right to do this? If so that is fine. There is negative equity in the home so I cannot sell nor refinance without more money down. I may qualify for the government HARP program but with her putting the house in active bankruptcy it disqualifies me.

I really need some advice. I am trying to get her off the loan and refinance to lower my mortgage payments.

Correct me if I am wrong, I am guessing this is more of a bankruptcy attorney question, but if her income level was too high she may have had to include the house in her bankruptcy in order to qualify. Could that be considered bankruptcy fraud? She does nor did she make any mortgage payments since November of 2011.

Thanks for any advice that is given.

 

[ecmst12]

If her name is on the mortgage, she is obligated to it and it is her debt. You may be paying it (as you should be), but that doesn't take it out of her name.

 

[meetthecreeper]

If her name is on the mortgage, she is obligated to it and it is her debt. You may be paying it (as you should be), but that doesn't take it out of her name.

I think you are misunderstanding. I am trying to get her name taken off. I want the mortgage in my name only. I cannot assume the mortgage because she has it in active bankruptcy. This also means that I cannot refinance. We agreed that I would take control of the mortgage debt. She jumped the gun in a big hurry to file bankruptcy when she agreed in divorce papers prior to that to allow me to refinance removing her from the mortgage.

Understand this is costing me 500-600 a month based on todays interest rates.

 

[ecmst12]

Oh I understand that. The point is she CAN add the debt to her bankruptcy because it's her debt.

 

[meetthecreeper]

Oh I understand that. The point is she CAN add the debt to her bankruptcy because it's her debt.

So she can sign divorce papers stating that she will do X,Y, and Z and then do whatever she feels like? I do not understand why then that adding that she will allow me to refinance with 90 days of the divorce was even put into the divorce decree.

I am guessing I needed a better attorney.

That being said what are my options? She is not going to reaffirm the mortgage so....? Very confused. I thought that what was in the divorce decree that we agreed upon goes.

 

[ecmst12]

She probably did not realize that her bk will prevent your refinance, but honestly it doesn't even matter since you can't refi now anyway since you have no equity. Might as well wait until her bk is complete, the market might improve a bit by then (I don't know how far upside down you are) and you will be able to refi then. But I don't see how this could be costing you more money leaving things the way they are. Your house payment is still the same.

If for some reason it is ONLY her including the house in her BK that is the reason you can't refinance (which is not what it sounds like and doesn't make sense), then feel free to file for contempt in family court.

 

[meetthecreeper]

She probably did not realize that her bk will prevent your refinance, but honestly it doesn't even matter since you can't refi now anyway since you have no equity. Might as well wait until her bk is complete, the market might improve a bit by then (I don't know how far upside down you are) and you will be able to refi then. But I don't see how this could be costing you more money leaving things the way they are. Your house payment is still the same.

If for some reason it is ONLY her including the house in her BK that is the reason you can't refinance (which is not what it sounds like and doesn't make sense), then feel free to file for contempt in family court.

The house being in BK is the ONLY reason why I cannot refi. I have money to put down if I have to and I also qualify for the government HARP program if I wanted to go that way. I cannot assume the mortgage because she has it in her BK. I cannot do a refi because she has it in BK. I also cannot qualify for HARP because she has it in BK. I had already qualified with a lender to refi my house, then this BK came up and locked everything. Sorry I should of mentioned that in my first post.

 

[ecmst12]

Ok, you can try filing for contempt and see if you can get her to remove the house from her bk.

 

[rooms222]

I think you need to consult with a seasoned bankruptcy attorney, preferably one who has been a trustee in other actions in the same district, and one who has done creditor's rights, as well as debtors. The potential actions to speed up this process (if they are make financial sense) will come from the bankruptcy court and not family court, as she is protected by the automatic stay that comes from filing bankruptcy at this time.

Your wife has the right to file for bankruptcy. What your bankruptcy attorney can do is file for a "relief from stay" about the house, so that then it is no longer part of the bankruptcy estate, and your refinancing can move forward. Your other option is to wait for her discharge, which is usually 6-9 months in a chapter 7.

If, in one part of your post, you were saying that she was using the payments on the house as her housing payment in the budget to be allowed to file for chapter 7 bankruptcy, calling her on this may be correct, but also it will have the tendency of lengthening the case as this issue is fought out in front of a judge. Such a fight will most certainly have the house remain part of the estate, delaying refinancing. Still, an attorney may be able to ascertain what's going on and try to negotiate a solution.

Most bankruptcy attorneys have a free initial consultation, and then you can get an idea of the potential fees and whether relief is viable.