How Will My Ex Filing Bankruptcy on a House We Cosigned Together Affect Me?
If your ex-spouse dumps your co-owned mortgage on you, consider refinancing.
Divorce and Bankruptcy
When homeowners divorce, matters such as any mortgages on their homes should be fully addressed in the divorce process. Unfortunately, many homeowners divorce and fail to settle just who's liable for a mortgage in the event of bankruptcy of one of the homeowners. Like most types of credit, mortgage loans are the responsibility of all owners signing onto them. When filing for bankruptcy, an ex-spouse co-owner of a mortgage loan would probably seek to have any personal liability eliminated.
Types of Bankruptcy
Whether or not you end up paying completely on a mortgage you and your bankrupt ex-spouse owned together depends on the type of bankruptcy filed. "Non-support obligations" such as co-owned mortgages are non-dischargeable in a Chapter
7 liquidation bankruptcy, for instance. In other words, you can contest your ex-spouse's Chapter 7 bankruptcy attempt to discharge the mortgage debt you both jointly own. A Chapter 13 reorganization bankruptcy, though, has more flexible rules on discharging non-support obligations, including co-owned mortgages.
Enforcing Divorce Decrees
Mortgages and Titles
Married homeowners divorce and sometimes also fail to address legal ownership of their homes. If you end up paying on an entire mortgage loan you once co-owned with your now-bankrupt ex-spouse your home's title bears examination. Remember, mortgage loans are debts while property ownership is defined by property titles and your bankrupt ex-spouse could still be a legal owner of your home. If your divorce decree didn't end your now-bankrupt ex-spouse's co-ownership of your home correct that discrepancy using legal assistance.
Reducing Mortgage PaymentsSource: homeguides.sfgate.com