If I’m a co-ownerof a house and the other co-owner files for bankruptcy, how will this affect me?

UPDATED: Mar 1, 2012

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If I’m a co-ownerof a house and the other co-owner files for bankruptcy, how will this affect me?

I purchased my home with a friend. The note is in her name and both of us are on the deed. She lives in another state and is going to file bankruptcy. How will this affect my ownership of the house?

Asked on March 1, 2012 under Bankruptcy Law, Arkansas


MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

You may own the home but the deed and note are two different things. The note (actual promissory note/loan) is secured by the mortgage to the home (the home is the security). So if you are only on the deed, you stand to lose the home due to the mortgagee/servicer taking the home post bankruptcy if your friend does not reaffirm the debt. You will need an attorney to see if you can work with the lender/servicer to refinance the home solely in your name and see if your friend is willing to quitclaim her portion of the deed to you. If you can refinance it to you, then the friend no longer has the home to include the bankruptcy and no longer has the mortgage loan to include in the bankruptcy.

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