If I leave my ex-wife on my current home loan, what legal issues could I face if either of us has to file bankruptcy?

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If I leave my ex-wife on my current home loan, what legal issues could I face if either of us has to file bankruptcy?

My divorce was finalized 9 months ago and our home was awarded to me. The divorce states that I need to get the house put in my name when feasible, with no set completion date. Because of the decline in housing prices, I can’t get my house refinanced because I’m upside down. I can do an assumption of the loan, but the loan company charges $1,100 to do this not including the title work fees and I don’t have the funds. My ex-wife now solely owns her own home. We are civil and pay our own bills. If I do nothing now and either of us has to file bankruptcy, what issues could arise with our homes?

Asked on August 2, 2011 Arizona

Answers:

MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

If neither of you can afford this home on your own, then what could occur is that her credit could be impacted and this will impact her other home she owns. The trustee would be looking for assets and possibly forcing sales of homes or other property. Of course, if you have a homestead exemption, that may help. The issue now is whether or not she can take on the home loan hersel and simply refinance and buy you out. Try this as a possible solution to your divorce decree and upside status of your hoe loan. Further, you can try for a loan modification and contact your state's regulator for filing a complaint if the lender or servicer takes too long to to process your application.


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