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Is the home loan you co-signed part of your ex's bankruptcy?

Did your former spouse decide to keep the marital home in the divorce? If so, he or she probably also agreed to pay the mortgage loan as well. The problem is that if you failed to have your name taken off that loan, you may still be responsible for it long after your divorce is final.

Perhaps the circumstances at the time did not allow your former spouse to refinance the loan, which would have removed you from the existing loan and removed your obligation to the lender. You believed that your ex would continue to make the payments as he or she agreed in the divorce settlement, but then you discovered that your former spouse filed for bankruptcy. How will this affect you since you remained on the mortgage loan?

Did your ex file for Chapter 7 bankruptcy?

If your ex filed a Chapter 7 bankruptcy, the odds are that he or she no longer wants to be financially responsible for the home. This debt may be discharged, which means your ex would no longer be legally responsible for paying the debt.

The lender will simply come to you for payment of the mortgage loan since you remain financially responsible for the debt even though your ex agreed to take over the payments in the divorce. The lender will not care what your divorce settlement says since it was not part of that contract. It has the legal right to pursue payment from you regardless. If this happens, you may be able to take your ex-spouse back to court for compensation directly from him or her under the divorce settlement.

Did your ex file for Chapter 13 bankruptcy?

If your ex filed a Chapter 13 bankruptcy, the odds are that he or she wants to keep the home and intends to continue to make payments on the mortgage loan. In fact, as part of the repayment plan the court approves under this chapter, your ex is required to remain current on the payments. During this time, your interests remain protected until or unless your former spouse fails to adhere to the repayment plan.

Protecting your interests

If you discover that your former spouse filed for bankruptcy on a debt that you continue to remain legally liable for, it may be in your best interests to obtain a thorough understanding of your rights and obligations, along with any legal recourse you may have against your ex should the mortgage lender come knocking on your door for payment.

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