Divorce, Foreclosure, and Bankruptcy

[fjsteven]

My divorce has just been final. In the papers, it says she is responsible for the payments, and, in the event of a shortfall in the sale, or a foreclosure, we would be responsible 50/50.

I knew in advance the only option was to have the house foreclosed on. If both of us are not in it and paying the note, there is no way we can keep it. Also, unless some bank comes in and makes a large modification, neither of us can afford to keep it or qualify for a new loan.

I also know I am filing for bankruptcy as soon as I can gather all the information.

So.....

Should I include the house note? Can I include the house note? Should I wait until it is foreclosed on, or should I declare before foreclosure starts?

Thanks!

[StartingOver08]

Yes, you must include the house note in your future BK.
You can either file before, during or after foreclosure.

If you file BK before foreclosure you will only show the BK on your report and not both the BK and the foreclosure action.

[bulletproof77]

I am also going through a Chapter 7 BK (had my 341 May 1, 2009) a foreclosure and a divorce after 24 years...My sympathies to the OP, it's not easy dealing with all the emotional aspects, much less the financial ones. Your not alone. Been there, doing that in the Inland Empire...

[HHM]

Well, at least you are getting the big 3 out of the way roughly at the same time.

[fjsteven]

Can I list the note even though we are both on the loan, and only I am declaring BK?

Thanks!

[LuciluS]

Can I list the note even though we are both on the loan, and only I am declaring BK?

Thanks!

Yes, you Must list the Loan in your Bankruptcy. I'm not sure how A Divorce Decree works with a Mortgage/Deed.

I do know that any joint credit cards listed in a Divorce Decree that states the Ex-Wife is responsible for X credit card doesn't mean squat in Bankruptcy.
I had a this X credit card which still had my Ex-Husbands name on it. We thought in 2005 all 3 (me, new hubby & Ex) of us signed a form releasing my Ex's name from the credit card. They never did it and we tried last Oct. to take his name off of this credit card. Well, by that time, mine & DH credit was shot and they refused.

Ex's new wife paid off the credit card and I will owe her the money after our Bankruptcy is closed interest free and it was a large amount.

I'm thinking if both names are on the mortgage and the Deed, when you file Bankruptcy, your ex will be responsible for the mortgage.

You really need to talk to a Bankruptcy Attorney. A lot of them have free consultations. Make some appts. with at least 4 of them and see what each has to say in regards to the mortgage.

Luci

[plantlvr]

And i thought I was the only one
Did the BK, Divorce, and Foreclosure [looming, not there yet] plus had both my Parents die in the same time frame, what a year...My ex is going into BK so maybe I can live in the house longer, but right now it's been 8 months with no NOD. I did include my mortgage payments in my BK, even though my ex gave up his rights as a homeowner, he's still on the loan. I told him that he has to include the mortgage when he files or the bank will come after him.
Good luck to you and hopefully you can stay in your house for awhile and save some money!

[bulletproof77]

and I thought I WAS THE ONLY ONE this personal hell could happen to all at once. Thanks for letting me know I'm not the only one..Ex-wife still living in house 6 months and no NOD. But then, it's in the foreclosure capital of the world-the High Desert of California-San Bernardino County, CA. The home of entire vacant neighborhoods. Heck, the vandals don't even bother them any more, there's just so many of them....Apartment living after being a homeowner for 28 years really sucks though, wish I'd rented a house...........sigh

[jherron]

Foreclosure during Chpt 13

This was meant to be a new post..not a reply. Sorry

[Clabbergirl]

I see this is an old thread but it applies to my situation very closely, so I thought I'd post here. If it's the wrong place, my apologies and I hope someone directs it appropriately.

My divorce was final June 2010 and ex signed a quit claim which was filed. Decree says I have 1 year to refi in order to get his name off the 2 mortgages, only the months of separation on one income in 2 residences destroyed our credit (foolishly co-signed on ever single debt). I didn't qualify for a loan mod and certainly not a refi so my house is in foreclosure (received NOD in July?) with mine and my ex as the responsible parties. There is no equity in the house.

I'm researching BK, and the means test shows I qualify for Chapter 7 & 13. I'd like to keep the house but I can't do it under the original terms of the loan (payment equals $1257, ins. & tax included). My ex is furious about my not refinancing and is poised to file a contempt petition on me (even though the reason I couldn't make payments is due to his not paying pay child support). It was also the beginning of the slippery slope of financial ruin that brought me to this forum.

Which, if either Chapters will allow me to file BK and honor the divorce decree by getting his name off the property?
And if I file 7 and am allowed to keep the house and car, is it always a case of having to pay the same monthly amount, or do lenders sometimes re-negotiate?

Any advise is welcomed and appreciated.

[bulletproof77]

tough situation...

A 13 may allow you to "strip" a second mortgage, but the first mortgage is a whole different story. If your credit is shot as you say, I really doubt your first note holder will agree to any type of a refinance, especially with just one income. A Chapter 7 is the nuclear option and allows you to walk away from the first (and second, if included). That is what I did during my divorce, because it was impossible to get the bank to do any type of refinance and they would not even entertain the idea of getting her name off the deed. (BofA, btw..) In the end, I had to let my house go into foreclosure, because I think you will find the banks less than cooperative to removing anyone off the deed, court order or not. You really need to speak to a good attorney and see what they say. You may need to look at the long term and entertain the idea that you may not be able to keep the house. Divorce, BK and an uncooperative lender is just a giant mess..Glad mine is over with. You also need to seek enforcement of the child support order as you CAN count that as income towards a refinance. I pay my support on time and don't have a ton of sympathy for those that don't. His "anger" seems pretty hypocritical..

[Clabbergirl]

Bulletproof7, the child support is coming in now, so one less fire to put out. But even with that and my income, I cannot support myself and daughter with a mortgage and car payment as they currently are. The mortgage co's (Suntrust and EMC, btw) won't honor a divorce decree - none will. It sounds like I can only keep the house if the lenders will work with me (and they would not earlier in the game).

I don't want to lose the house of course, but I will certainly do so if that keeps me out of jail for contempt of a court order! I had to file contempt on my ex in order to get the child support, and he feels like retaliation (yes, very hypocritical). I want to file BK, but also want to know if there's any other way to get the ex out of the picture (the financial picture!)...it's starting to look like I'm screwed...

The trouble is finding the $ to hire a lawyer. I'd like to do bk myself since I'll be the one doing all the legwork and supplying forms...but so many questions first.

[bulletproof77]

A lot of BK attorneys will allow payments until filing. If that doesn't work, a decent paralegal service can do the paperwork for a few hundred. It's pretty simple and a BK is not too hard to do. I don't see how he could get you for contempt if you are trying to comply with the order, but the banks simply won't. A judge will not order the bank to comply with a loan modification anyway, so what are you supposed to do ? Let him make all the threats he wants, no judge will jail you for a bad housing market..And one last thing, out of all the lenders, I have heard those two are among the worst..