If a co-borrower on my mortgage has a significant financial change in their life, how would I or my mortgage be affected?

Get Legal Help Today

Compare Quotes From Top Companies and Save

secured lock Secured with SHA-256 Encryption

If a co-borrower on my mortgage has a significant financial change in their life, how would I or my mortgage be affected?

For example, bankruptcy, death, being sued, etc.

Asked on July 30, 2010 under Real Estate Law, Michigan

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 13 years ago | Contributor

This question shows such foresight in to the future.  It is, unfortunately, difficult to answer completely without knowing more about your lives and how they are intertwined.  For that you need to seek help from an estate planner. I am assuming that the co-borrower is also a joint owner of the property.

In general, if your co-borrower were sued and there was a judgement rendered that could not be paid completely through another insurance policy (such as an auto policy) then the judgement creditor could attach their assets.  That would be a lien on their house, personal property, etc.  As for the bankruptcy, it depends on if there is a homestead exemption in your state, if the reaffirm the mortgage in bankruptcy, etc.  As for death, if it is a joint tenancy with rights of survivorship then it would pass to you upon death and you would be obligated for the full mortgage.  Mortgage insurance may then be a good idea.  If it does not pass then half the house goes in to their estate and how that will effect you depends on if the estate wishes to hold on to the house or sell their portion to liquidate funds. Seek help.  Good luck.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption