Chapter 7 bankruptcy
5 attorney answers
If the mortgage is not paid timely the girlfriend will not be able to stay in the house. Since the boyfriend filed he is protected by the bankruptcy, she is not. She will have to make arrangements for herself, whether it is a bankruptcy or some other arrangement.
There is a legal concept known as joint and several liability which applies in tort law, but the result is the same when two people are both liable on a promissory note. Both are liable for the entire obligation. The creditor can file suit against either one to collect the debt or can file suit against both of them to collect the debt. Some people think that when one person is the primary borrower and the other is the co-debtor, that makes the primary borrower more liable than the co-debtor. Not true. The creditor could pursue collection against the co-debtor if that is the easiest route to get paid and let the co-debtor worry about trying to collect from the primary borrower.
A bankruptcy discharge only discharges the obligation for the benefit of the person that files the bankruptcy. The party that has not filed yet, is still obligated for the full debt. The bankruptcy for the boyfriend in this instance should not appear on the credit report for the girlfriend because she has not filed a bankruptcy and has not received the benefit of a discharge of the joint debt or any other debts that she may owe.
My answers assume that the boy friend filed a chapter 7 and has received his discharge. Here are the answers to your questions:
Can the mortgage company go after the girlfriend and make her pay the full amount of the mortgage or is she protected by the bankruptcy law? The mortgage company can file suit against the girlfriend, can report to the credit bureaus that she is in default by the four months because she is not protected by the bankruptcy law.
Girlfriend is still living in the home and would like to keep it. could she offer half of what the mortgage balance is? She can keep the home, but she will have to bring the loan current and continue making the full payment. Half will not satisfy the mortgage company. Since the boy friend is still a 50% owner of the property, she should get him to sign a quitclaim deed so that she owns 100% of the parcel if she plans to try to keep the home. There is no reason to build up equity for him. She can ask the mortgage company for a loan modification. She can file a chapter 13 and catch up the arrears over 3 to 5 years and start paying the regular mortgage payments along with the chapter 13 plan. She can give up the home and file a chapter 7, but she should not move from the home until the foreclosure is complete. Sometimes mortgage companies take months or even years to foreclose.
As you can see, there are a lot of moving parts. The girlfriend should meet with an experienced bankruptcy attorney that handles chapter 7 and chapter 13 cases even if she thinks that she needs to file under chapter 7. She should become educated on all the issues involved and related to her current economic situation, find out the advantages and disadvantages for filing under each chapter and use an attorney that can help make the right decision. Most bankruptcy attorneys will meet with her at no charge for the initial appointment. She can use the Avvo "Find a Lawyer" link at the top of this page to search for an attorney.
Answers and comments provided are for general discussion only. My comments are not to be considered legal advice and they do not create an attorney-client relationship.
If you want to live in a home, you need to pay the full mortgage. You need to bring the arrearage current and keep the monthly payments current. If someone owed you money, but got divorced, why would you settle for 1/2 of what is owed, when legally you do not have to. To properly answer your questions and address your concerns, the best way to handle this is with an in person consultation with an experienced bankruptcy attorney. Use AVVO's Find a Lawyer tool to select a qualified attorney. Good luck.
If you found this Answer helpful, please mark it as "Best Answer" Please be advised that the answer above is only general in nature cannot be construed as legal advice, given that not enough facts are known. It is your responsibility to retain a lawyer to analyze the facts specific to your particular situation in order to give you specific advice. Specific answers will require cognizance of all pertinent facts about your case. Any answers offered on Avvo are of a general nature only, and are not meant to create an attorney-client relationship.
As a piratical matter, both parties will be tossed out after the bank finishes foreclosing, which will probably begin soon after a chapter 7 discharge if nobody has caught up the payments. His personal liability to pay the loan may end due to bankruptcy, but the bank's mortgagee's interest survives unaffected, so they need to make other arrangements if they want to stay there. An experienced bankruptcy or foreclosure defense attorney could quickly tell the status of the foreclosure from public records, as how one or both of them could preserve their homestead rights by resuming payments (and catching up on the missed ones) through a new chapter 13 bankruptcy filing..
My answer does not automatically make me your attorney, so you need to consult with your own attorney before acting upon any of my comments and may contact my office at 333 Main St, Racine, WI 53403, 262-633-3090, during business hours, or see me on the web at www.jayknixonlaw.com. or past online answers at the following links: http://www.lawguru.com/answers/attorney_control_panel/answered , http://www.avvo.com/attorneys/53401-wi-jay-nixon-1529181/answers.html?sort=recency. Answers may contain advertising materials.
My answer here does mean that I am representing you, so be sure to consult your own attorney before deciding on what you should do.
The loan has NOT been discharged. His responsibility for it has been removed. She still owes everything. And he still may have a claim to part of the equity of the house.
Each owed the full amount of the mortgage and the bank could ALWAYS come after each or the other for the full amount of the mortgage. Now they can only "come after" her for the excess. And she is lucky he has not made her sell the house before - he can force that in court to get back his half.
In short, think of it as your mortgage as if he never existed. Close enough to the truth, except that if there is money gotten back after the home is sold, he gets a share.
This should not be considered legal advice and is intended for educational purposes only. It does not constitute a contract for legal services between any parties. Answers are given to questions for which there may be additional facts not mentioned which might change the legal issues or consequences.