What happens if one person on a mortgage files bankruptcy?

What happens if one person on a mortgage files bankruptcy?

When a person files a bankruptcy, it relieves that person of their eligible debts. In this case, the ex will be relieved of her personal responsibility for the loan. Your son still has personal responsibility for the loan and he is not involved in her bankruptcy.

Is a spouse’s property taken if only one person files for bankruptcy?

Beyond just debt, another issue for married couples to consider when evaluating bankruptcy is property owned by the spouses. If one spouse owns property in their name only and is not the spouse filing bankruptcy, it generally won’t become part of the bankruptcy estate.

Can my wife file bankruptcy without affecting me?

If you are married, you can file an individual bankruptcy without your spouse. But even if you file alone, your bankruptcy can have consequences for your spouse.

What happens if one spouse files for bankruptcy and not the other?

If a husband files bankruptcy without his wife, only the husband’s debts are discharged. If the debts are held jointly, the non-filing wife will still owe even after one spouse has filed bankruptcy. The bankruptcy filing will appear on the husband’s credit report, but should not appear on the wife’s.

Can a spouse file bankruptcy and not be liable?

Same as common law property states, only the spouse filing bankruptcy gets a discharge. The non-filing spouse is still liable for his or her separate debts and joint debts.

How does a bankruptcy affect a married couple?

If you are married and considering bankruptcy, you should consider how your bankruptcy filing will affect your spouse and the property you own together. The answers depend on what type of case you file, whether you file alone or with your spouse, how you own your property, and the laws of your state about marital property.

What happens to your credit when your ex-spouse files bankruptcy?

However, if your ex-spouse was discharged from the obligation of a joint-owned or cosigned debt, the creditor has the right to demand payment from you. If you don’t pay the debt, then your credit could be negatively affected. In rare cases, the creditor may inadvertently notate the filed bankruptcy on the non-filing spouse’s credit report.

Can a creditor go after a spouse in Chapter 7 bankruptcy?

Under Chapter 7 bankruptcy, when a spouse’s debts are wiped clean, the creditor can go after the other spouse. However, a major advantage of Chapter 13 bankruptcy, where the debtor plans to repay her debts, is that the creditor will leave the co-debtor alone, as long as bankruptcy plan payments are timely deposited. Are There Any Exceptions?