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Shared property and one party filed BK

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    Shared property and one party filed BK

    In 1983 my ex and I purchased a home in So. Cali. In 2002, I was led to believe because I had little credit, to let him put the home in his name for refinancing. I did. After, he took out 2 more mortgages that went into default after ex disapeared. He later filed chapter 7 bankruptcy. HSBC, 2nd and 3rd mortgage forclosed, first mortgage "was" current. House was sold for 2nd and 3rd mortgage cost only at a trustee auction.
    We also owned a lot together free and clear worth 80K
    My divorce attorney has a temporary deed/security as third owner on the lot but this too, due to bankruptcy is frozen from being sold.
    I am worried that since our home was only sold for the balance of the 2nd and 3rd mortgage that the lot we own together will be forcefully sold to make up the difference for the first mortgage which is just now going into a three month default but not forclosure. A third party who has contacted me purchased the home at auction who is not a mortgage holder.
    Since only the lot is left and there are now three people on the deed of the lot, will the other two parties not involved in the bankruptcy which shares the deed automatically lose our share of the lot value to pay for his first mortgage owed on the home?
    Or... will the new owner of the home sold at auction be responsible for the 1st mortgage on the home which, if that is the case, the home will be paid in full and our lot left alone?

    After thought

    My credit is fine since I was not responsible for the loans took out in ex's name but my share of the lot is all I have. 2 innocent parties apart from the ex's financial problems. Do innocent parties lose?
    Last edited by Gcapps; 12-23-2005, 03:28 AM.

    #2
    Wow, what a tangled situation. To make it even worse, CA is a community property state.
    My assunptions, yes they can sell your portion of the lot. They might sell it back to you or they might try to get the other 3 to each pitch in their share.
    I also don't see how you are not in deep financial trouble. Anything that has both of your names on it, they will come after you to collect the outstanding debt. In CA, you might not even have to have your name on it.
    BK trumps any divorce settlement.
    Innocent parties suffer every day.
    No one, outside of a baby, is completely innocent. Art

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      #3
      Art makes a good point about CA being a community property state. If those debts were taken out when you were married, you owe them. Now that he has filed for BK, his debt will be discharged leaving you 100% on the hook.

      Speaking to an attorney (or 5) would be a good move.
      Most of my information is from personal experience or HOURS and HOURS of online research. When you're searching online, keep in mind there is no guarantee that the info is completely up to date, and your situation is unique from anyone else's. Do your homework, and consult with an attorney so you can make an informed decision.

      Comment


        #4
        The creditors have no clue I exist

        In the bankruptcy papers from his lawyer, the home was listed under my ex's name as a sole and indepentent owner. No one has come after me and my credit is still at approx 6.8.
        The creditors have no clue I exist since I was not on the deed of trust since 2002. The loans he took out himself after the transfer of the deed of trust. My lawyer is also part owner of our lot and also has nothing to do with the foreclosed home, yet he has finacial interest in the lot.
        I'm curious if the new owner which purchased the property will now be responsible for the 1st deed of trust.
        If they are and since the 2nd and 3rd mortgage was paid in full by the trustee sale, my lot will not be touched as there are no other leans on the home or secured debts he owes.
        The home has not been mine since 2002 and we are divorced.
        Our financial obligations have been independent for years with the exception of joint ownership on the lot. The home does not affect me credit wise and has remained in his possession after the divorce, not mine as sole and separate property. It's the lot I'm concerned about and what is going to happen to my lawyers share of the property and mine.

        I wish I could afford another attorney. As it is, I had to lose a third of my lot to pay for the attorney I had.
        Last edited by Gcapps; 12-23-2005, 11:53 AM.

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