I was divorced about 2.5 years ago and the decree stated I was to refinance the home and not hold him responsible. I was never able to do so, and with the market, there is about $20k in neg equity. I could probably get approved now, but wouldn't have the extra money. I'm at the point after trying to sell it for nearly two years that I would rather foreclose on it and move on as he has. I can accept what a foreclosure will do to my credit, but I'm worried about what he or a bank could do to me since I was ordered in the decree to refinance it. Thank you for any advice you might offer.
Chapter 7 Bankruptcy Attorney
Once the first mortgage forecloses on the residence, the 2nd mortgage is an unsecured debt and they can legally pursue anyone originally liable on the debt. I assume your ex-husband is a cosigner on the loan; therefore they could legally sue both. Your ex-husband's option would be to either file a cross claim against you, or proceed in the divorce court to hold you responsible for the obligation. One thing you should consider, is switching places with your ex-husband. If he wants the residence, you could move out and he could become responsible for the payments. Before proceeding to a bankruptcy you should talk to your divorce attorney as the judgment of divorce would need to be modified. As it stands if you proceed with bankruptcy your ex-husband could proceed with an action in divorce court, to hold you responsible. Would your husband consider bankruptcy? As you may have additional options if he is open to the idea of a bankruptcy. Email me if you have additional questions.