what happens when ex spouse files bankruptcy when home is in both our names?

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Icon Mini Profile coeyjazzemein





Joined: 05 Jan 2011

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Post Posted: Wed Jan 05, 2011 2:04 pm    Post subject: what happens when ex spouse files bankruptcy when home is in
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Hello, this question is similiar to one already posted. My exhusband (divorce finalized 20JUL10) and I bought two homes while living together, one in WA and one in CO. The house in WA is under contract and will close 1FEB. So we won't have to worry about that. The home in CO has had a big drop in value, and can't be sold unless we sell it at a significant loss. We are trying to rent in right now, but its been empty for 2 months. He is filing bankruptcy, I am active duty military and live overseas. Since the house is in both our names, will it just roll over to me and then I will be solely responsible for the mortgage? I will not be going back to the states for 4 years. If he could just roll that house into his bankruptcy, I wouldn't mind losing points on my credit to not have to deal with that house anymore, is that even a possibility?
Icon Mini Profile smithsussane
smith.sussane




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Post Posted: Wed Jan 05, 2011 7:50 pm    Post subject:
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Hi coeyjazzemein!

Welcome to forums!

If your ex-husband files bankruptcy, then he will get a discharge from the mortgage payments. In such a situation, the lender will come after you to recover the dues. If you don't mind losing your credit score, then you can apply for a deed in lieu of foreclosure with your lender. If the lender accepts this, then you won't be liable for paying off the deficient balance resulting from the property sale. But your scores will drop by around 250 points.

Feel free to ask if you've further queries.

Sussane
Jazzemein

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Post Posted: Thu Jan 06, 2011 1:04 pm    Post subject:
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Would it be possible to transfer the whole house to him with a quit claim deed? It's something he might go for since his credit is jacked anyways I think he would be ok with taking the hit. But if I did sign the house to him would my credit still go down? Would there be a way for the lender to still come after me for the rest of the house payment?
Icon Mini Profile adonis
adonis




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Post Posted: Thu Jan 06, 2011 9:55 pm    Post subject:
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Hi Jazzemein,

You can transfer the property to him in order to release all ownership over that property. But this will not release you from the mortgage. In order to remove your name from the mortgage, he will have to refinance or assume the loan.

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