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herbtea · Joined: 07 Sep 2008 Posts: 2 2.72 Dollars($)

If I file taxes separately when my husband is on mortgage and I am just on title, and he bankrupts....We refinanced to an Option ARM mortgage which will go up in a couple of years. He let it negatively amortize about $14,000. Even before that when the real estate market fell in our area, it was upside down - now about $75,000 so we are unable to refinance.
He insisted on this mortgage and I stupidly agreed. His name only is on the mortgage, but my name is on the title to the house along with his. I found out and insisted on paying at least the interest, and we have been splitting these payments together for the past year, and for about 5 months I paid enough more to cover interest plus principal (on 30 year basis).

However, my husband meanwhile has large credit card and loan debts personally and for his sole proprietorship. He is considering filing for CH 13 bankruptcy. We may lose the house eventually.

If he stops paying and we lose the house, since only he is on the mortgage - how will this affect me? I am on the deed with him. Can the Countrywide (B of A) come after me for the mortgage money? Will this trash my credit as well?

I cannot afford to carry the house payments myself or more than I am already. I would rather be free and clear of this mess than keep the house. If I sign a quit claim so the house title is in his name only would that keep me out of further financial liability?

We have filed jointly in the past, but haven't filed yet for year 2007. If I file separately for 2007, will that make a difference in my liability for house or to my credit report if he has to default on the mortgage or files bankruptcy and has some sort of reduced mortgage agreement for a period of time?.

Guest

If your husband is filing chapter 13, you won't lose the home. All your husband needs to do is keep making payments on whatever debts he has included in the bankruptcy. Also, the trustee will make him pay as much as he can afford. This should be done in agreement and under supervision of the court.

If you are not on the loan, then countrywide shouldn't come after you. But if you'd like to save the home, then you'll have to pay in case your husband doesn't.

If the house is lost in foreclosure, it may affect your credit considering the fact that you were on the title.

A quitclaim doesn't remove you from financial liability. But it does remove your name from the title. However, if the loan doesn't belong to you, it's not your liability to pay. So, you can quitclaim and take your name off the property.

herbtea · Joined: 07 Sep 2008 Posts: 2 2.72 Dollars($)

Thank you very much, that is a big relief.
One more question about it-- I read something about a one year look back on quit claims. Does that have anything to do with it for me? Would the bank list me as bad credit in the case the house is foreclosed on, within a year, if I had a quit claim done during that year?

sara · Posted: Mon Sep 08, 2008 3:42 am Post subject:

The concept of a look-back period arises when a person transfers property by quitclaim deed prior to applying for Medicaid. I haven't heard of any look-back period related to quitclaim otherwise.

Take Care

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