Ex-wife still jointly owns house...will she be affected if we declare bankruptcy?

[puplefi]

I just got married two years ago. my husband was divorced ten years ago, and was granted the house we live in in the divorce settlement. we recently discovered his ex-wife's name is still on the deed to our house, even though she was ordered in the divorce documentation to remove her name from the deed. we have asked her to do so, and she is threatening to go after my husband for more money.

my husband, in the meantime, is struggling financially. he is a small retail business owner and we have been affected by the recession. he may have to file for chapter 13 bankruptcy. if he files bankruptcy, would his ex-wife's credit rating be affected, since she is still on the deed to our house? the mortgage is fully paid for, so that is not an issue.

[NoMoreCards]

If there was a mortgage, the financing company could come after the Ex for the balance due/deficiency after (if) the house was foreclosed upon and sold. However being as there is no mortgage, there will not be a foreclosure/sale or deficiency.

So the ex's credit rating should not be affected in this way.

Keep in mind however, dependent on your states household exemption there may be a problem with that. With her name on the deed, I believe that makes her a 50% owner of the property. So your husbands equity is 50% of the value of the home.

You probably should discuss the state specific laws with a local BK attorney. Most give free consultations.

[NoMoreCards]

After more thought, I honestly do not know if the equity in the house matters in a CH 13. So please check with a attorney.