Divorce and Bankruptcy

[MMS9779]

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

My state is Alabama.

My ex and I have a house together. I reside in the house. In the divorce decree, it is said that I am to make payments on it for a year. After the year, I have to assume the mortgage or sell it. The year is not up. My ex is the only one on the mortgage but we both are on the deed. How will a filing by my ex of bankruptcy affect my living in the house if it's chapter 7?

Thank you.

 

[LdiJ]

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

My state is Alabama.

My ex and I have a house together. I reside in the house. In the divorce decree, it is said that I am to make payments on it for a year. After the year, I have to assume the mortgage or sell it. The year is not up. My ex is the only one on the mortgage but we both are on the deed. How will a filing by my ex of bankruptcy affect my living in the house if it's chapter 7?

Thank you.

Its going to be a problem...you need to try to assume the mortgage ASAP via a refinance or whatever other vehicle is possible.

 

[MMS9779]

Its going to be a problem...you need to try to assume the mortgage ASAP via a refinance or whatever other vehicle is possible.

Does this mean that even though my name is on the deed, it is very likely that they will take the house as part of the bankruptcy if I don't refinance in time? What if I'm in the process of refinancing and bankruptcy is filed meanwhile?

 

[LdiJ]

Does this mean that even though my name is on the deed, it is very likely that they will take the house as part of the bankruptcy if I don't refinance in time? What if I'm in the process of refinancing and bankruptcy is filed meanwhile?

The home is collateral for the mortgage, so yes, the home can be taken. However, since you are on the deed the bank should communicate with you about things, and you should be able to let them know that you are in the process of refinancing the home into your name. My bigger concern would be if there is any equity in the home, because then the bankruptcy court might want a share of that equity to go towards his other debts.

Therefore, I would really get moving on this.

 

[tranquility]

Does this mean that even though my name is on the deed, it is very likely that they will take the house as part of the bankruptcy if I don't refinance in time? What if I'm in the process of refinancing and bankruptcy is filed meanwhile?

It is likely the entire property is security for the mortgage. How did your name come to be on the deed?

I'd call the bank to see if you can work something out in the bankruptcy. Also, I'd file as a creditor in the bankruptcy as well. See your attorney for assistance.

 

[MMS9779]

The home is collateral for the mortgage, so yes, the home can be taken. However, since you are on the deed the bank should communicate with you about things, and you should be able to let them know that you are in the process of refinancing the home into your name. My bigger concern would be if there is any equity in the home, because then the bankruptcy court might want a share of that equity to go towards his other debts.

Therefore, I would really get moving on this.

Thank you for your answers. I have two more questions. The divorce decree states that I am entitled to any equity in the home. Would the bankruptcy court still have a chance for a share of the equity? My biggest concern is having a home for my kids if this happens. I'm not sure I'll qualify for a refinancing. I have already spoken with the mortgage company and they will not start the assumption process until they are given authorization by my ex for me to speak on the loan. Do you happen to know, is there any way around this authorization if my ex is being slightly uncooperative, that is, does the divorce decree saying I am to take over the loan give me authorization?

 

[MMS9779]

It is likely the entire property is security for the mortgage. How did your name come to be on the deed?

I'd call the bank to see if you can work something out in the bankruptcy. Also, I'd file as a creditor in the bankruptcy as well. See your attorney for assistance.

My name is on the deed because we bought the house when we were married, only I had no income. So, I was then not on the mortgage

 

[MMS9779]

It is likely the entire property is security for the mortgage. How did your name come to be on the deed?

I'd call the bank to see if you can work something out in the bankruptcy. Also, I'd file as a creditor in the bankruptcy as well. See your attorney for assistance.

I see what you were saying. Perhaps I do not mean my name is on the deed but the house is in both of our names.

 

[LdiJ]

I see what you were saying. Perhaps I do not mean my name is on the deed but the house is in both of our names.

That means that your name is on the deed.

 

[tranquility]

My name is on the deed because we bought the house when we were married, only I had no income. So, I was then not on the mortgage

Then, the entire house is security for the loan.

The divorce decree states that I am entitled to any equity in the home. Would the bankruptcy court still have a chance for a share of the equity?

This is one reason you need to be listed as a creditor.

I have already spoken with the mortgage company and they will not start the assumption process until they are given authorization by my ex for me to speak on the loan. Do you happen to know, is there any way around this authorization if my ex is being slightly uncooperative, that is, does the divorce decree saying I am to take over the loan give me authorization?

If you can't qualify for a refinance, you won't qualify for an assumption. I am uncertain as to if a claim of contempt (for not cooperating with you staying in the house per court order) is stayed by the bankruptcy filing. Perhaps someone else may know.

 

[MMS9779]

Thank you guys for your answers.

 

[MMS9779]

Then, the entire house is security for the loan.
This is one reason you need to be listed as a creditor.

If you can't qualify for a refinance, you won't qualify for an assumption. I am uncertain as to if a claim of contempt (for not cooperating with you staying in the house per court order) is stayed by the bankruptcy filing. Perhaps someone else may know.

I don't want to file contempt. What I am wondering is, is there anyway to go around having to have my ex's authorization to a mortgage company to talk about the loan because in my divorce decree it states that I can take over the house? They won't start the qualification process without this authorization, but doesn't the divorce decree go above my ex's authorization?

 

[LdiJ]

I don't want to file contempt. What I am wondering is, is there anyway to go around having to have my ex's authorization to a mortgage company to talk about the loan because in my divorce decree it states that I can take over the house? They won't start the qualification process without this authorization, but doesn't the divorce decree go above my ex's authorization?

If your ex won't cooperate, you have no choice but to file for contempt...so that he is forced to cooperate.

 

[MMS9779]

If your ex won't cooperate, you have no choice but to file for contempt...so that he is forced to cooperate.

That is definitely not what I wanted to hear. Thank you again!

 

[tranquility]

I don't want to file contempt. What I am wondering is, is there anyway to go around having to have my ex's authorization to a mortgage company to talk about the loan because in my divorce decree it states that I can take over the house? They won't start the qualification process without this authorization, but doesn't the divorce decree go above my ex's authorization?

As I said, if you don't qualify to (re)finance the house, you will not qualify to assume the mortgage. You don't need the ex's authorization to attempt to get a loan on your own there or somewhere else. The contempt claim would be to force ex to authorize talking with the mortgage company if you really thought assumption would be easier for some reason. The court order does not force a mortgage company to listen to you. They can have whatever rules they want.