A couple gets divorced. They each pay half of the house pmt. if one files for bankruptcy on their half, does the other person have to file also?
2 Answers from Attorneys
The other owner does not "have" to file. The question is whether it is the best option. Determining that would require an analysis of the terms of the divorce and the non-bankrupt spouse's (at this point) financial situation.
First, if the terms of the divorce require the first spouse to pay half, that obligation may not be part of the bankruptcy discharge with respect to the ex-spouse. The bankrupt spouse may be personally off the hook as far the mortgage holder is concerned, but the other spouse may be able to enforce the obligations in family court. There may be other terms to consider. For example, is the house required to be sold at some point.
That said, it needs to be determined whether it is realistic to seek enforcement or whether it is a waste of time and money. If the bankrupt spouse is now off the hook for other debt and is in a financial position to be forced to honor the terms of the divorce, then perhaps enforcement is an option and the other spouse should return to his or her divorce attorney or a new family law attorney to discuss proceeding. If, on the other hand, it is clear that the spouse does not have an ability to pay or that forcing the payment will require constant court involvement, it may be more of a burden than it is worth.
If the bankrupt spouse is not going to pay, then the remaining spouse's financial situation must be analyzed, including the equity or lack of equity in the home. Bankruptcy may be a necessity or advised as the way to move on.
The scope of this space does not afford an opportunity to assess the situation and advise you. If bankruptcy is going to be considered, I recommend you assemble for legal consultation: (1) your income information for December 2012 through the present, including wages and unemployment during that period; (2) all your bills (copies neatly assembled, back pages included); (3) last four years’ tax returns; (4) a credit report (use www.annualcreditreport.com to obtain free report if not requested in last year); and (5) other information that may apply, such as copies of lawsuits. Call at your earliest convenience to afford the most opportunity in which to be advised about your best course. You are not required to use an attorney in your area.
I do not recommend filing bankruptcy on your own. There are too many complex issues. I have seen several posts on this site for debtors who filed on their own and are seeking counsel concerning complications. Most of them will have a hard time finding an attorney to get involved to unwind the mess without the attorney charging several times what would originally have been paid.
The other person isn't required to file for Chap 7 or Chap 11 bankruptcy; however, it
will be necessary for both to decide how they wish to handle the mortgage. They may
continue to pay the mortgage after discharge, with the lender's consent. Perhaps the
house is part of their marital settlement agreement resulting from the divorce, which
will control the responsibilities of both parties. So your inquiry is very general and advice
depends on the specific situation. Advice: consult with an attorney to whom you
explain the details.
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