NEW Mortgage w/cosigner BEFORE Chapter 7?

[backontrackOH]

The home I am renting is in foreclosure. I want to attempt to purchase it at the sheriff's sale. It's the house my wife passed away in (9/2009, cancer). It is the house my kids have grown up in. I am currently in the process of talking to a lender with my father as a cosigner. I can easily handle the mortgage payments (40% less than rent was!). Equity (down payment) should still be within state homestead exemption.

* Am I putting my father in any kind of jeopardy by asking him to cosign the mortgage (pertaining to the bankruptcy of course)? I don't want his credit to be affected by me filing bankruptcy. And, I don't want the mortgage to be a 'bridge' allowing my past creditors to get to my father!

* I will, of course, reaffirm the mortgage when I file. Is there any chance I could lose the house if I am current with the payments? I don't want to go through all this and end up having the house taken by the court or mortgage company.

* Can/will any of my past creditors attempt to place a lien on the home once it is in my name? If they do, will bankruptcy make that go away?

*Is this just a stupid idea for some other reason I haven't thought about?

We (me and 3 children) have such an emotional attachment to our home. There is nothing for rent anywhere in our school district. My kids need their friends for support (only 7 months since their mother died)! I don't want to uproot everyone and mess things up more than they already are. Please help.

[keepinitreal]

Is it possible for your dad to buy it by himself? You and your kids could continue to live there while you go through bankruptcy and after. Then you wouldn't have to worry about re-affirming the new mortgage or having the house taken from you.

[backontrackOH]

I thought co-signing would be a better idea for him. But, as I study it more, whether he cosigns or buys the house outright, it shows up on his credit the same. He may be better buying the house and renting it to me. That way, he can at least claim the rent as additional income (Ok, not so great when it comes to taxes).

[music12]

is your father able to buy the home from his own funds? because, one thing you DON"T want to do is to give your father the money and then have him buy the home. it would look like you are trying to hide assets.

if you are sure that the equity would be exempt, then to me it sounds like a very good idea to buy it. but get the help of a lawyer to make sure you don't make some mistake in the process.

i don't think your father would be held liable for anything but this mortgage by cosigning with you. your other debts will be discharged anyway, and even if something is non-dischargeable, only you are liable for your debt. cosigning a mortgage is not cosigning any other debt.

[SMinGA]

If he cosigns, the account may temporarily (until the reaffirmation is complete) report as 'included in the bK of another' or something similar. May not affect his scores, but I would think if you reaffirm then it would be a temporary (3-6 month) affect at most. So if he is not preparing to buy a car, house, etc. of his own in the immediate future, it should not be a big deal.

As to the other questions - should be non-issues. Your creditors will be impacted by the automatic stay when you file, so cannot take your home, etc. And just because your father cosigns on a home loan does not create a 'bridge' connecting him to any other debts you owe.

If your father does buy the home for you, in his name, perhaps sign a lease-purchase agreement with him.