What are my optionsif the co-owner of my mortgage is filing bankruptcy?

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What are my optionsif the co-owner of my mortgage is filing bankruptcy?

My ex and I purchased a home together 4 years ago. He moved out of the residence and has not paid any payments in over 3 years. He also signed a quit claim deed with a lawyer about 2 1/2 years ago. I recently have found out that he is in the process of filing bankruptcy. I don’t plan on selling my home and plan on continuing making payments on it as much as I can. Will his name just fall off the loan and I continue to make the payments as a sole owner, or will this cause me to go into foreclosure?

Asked on July 5, 2011 under Bankruptcy Law, Illinois

Answers:

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

Answered 10 years ago | Contributor

I am so sorry for your situation.  Even after the divorce the problems still come back to haunt you.  I would consult with a real estate attorney in your area as soon as possible and speak with a bank about refinancing the mortgage out of your ex husband's name.  Once he files for bankruptcy the lender will indeed call in the loan or begin foreclosure proceedings.  They have that right to do so under the law.  And if he has discharged the debt then they will look to you for any deficiency judgement that may be owed once the house is sold and the mortgage is paid off.  You need someone's help in negotiating a deal with the lender on your behalf.  Good luck to yo.u. 


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