Post # 1
After some research I’ve suggested to my mother that she file chapter 7 bankruptcy. The only debt she has is a house in foreclosure which she can’t sell because her ex-husband is co-signor on the mortgage and REFUSES to sign any documents. We’ve tried to sell this house multiple times, it’s currently empty, and it’s always the same stonewall from the mortgage company. The ex’s name is not on the deed. My mother is nearly 60 and has no interest in a credit score so I think bankruptcy is honestly her best option.
For bees who have filed chapter 7 bankruptcy, did you get a lawyer? If you filed by yourself, how was the process? Would you recommend she get a lawyer?
Post # 2
uncltredpearl: This doesn’t make sense. The deed says who owns the house. The mortgage says who promised to pay for the house. If your mom’s name is the only one on the deed, she can sell the house and then pay off the mortgage. The bank is not going to refuse to accept her payment because someone else also promised to pay for it. Or are you saying the house won’t sell for enough to cover the outstanding mortgage?
Also, bankruptcy is to discharge your debts so you don’t have to pay them anymore. You said the mortgage is her only debt, and it’s already in foreclosure. So what benefit would the bankruptcy provide?
Post # 3
uncltredpearl: You need to speak with a lawyer just to be sure your understanding is correct. I don’t understand how him being on the mortgage has an effect on her ability to sell the house. I could pay off my neighbour’s mortgage today if I chose to do so.
Post # 4
Tell her to speak with a HUD-certified housing counselor. A list of agencies is on the HUD website, and services are free. Bankruptcy is actually in some ways worse than foreclosure since it stays on your credit report longer. I don’t see the benefit for her filing bankruptcy.
Post # 5
More is owed on the mortgage than the house is worth. I’m co-owner on the deed and tried to get rid of it via short sale but the mortgage company would not cooperate. The sale was through an investor and we were in constant contact with his lawyer, it wasn’t possible.
Post # 7
uncltredpearl: The cost of proceeding with a foreclosure (attorney fees, etc) and then selling the house almost always is more of a loss than a short sale. As I recommended above try to get a housing counselor to communicate with the servicer for you. Sometimes they are more responsive that way.
Post # 8
definitely get a lawyer!! Does she own the house she lives in? If she goes bankrupt she can lose that too.
see what your options are before doing anything drastic
Post # 9
We’ve talked to a housing counselor, real estate lawyer and have exhausted pretty much all other avenues (other than burning the place down). Her credit report is not of importance; she pays cash for everything and refuses credit cards. She does not live in the home, she lives in my grandmother’s house and pays those bills. The mortgage company has started the foreclosure process but it isn’t complete and she doesn’t want to be stuck with a $30K bill because her douchebag ex won’t sign a few papers. She could wait until the foreclosure is settled but would still need to file bankruptcy for the difference
Post # 10
uncltredpearl: I don’t know a lot about real estate / mortgages / foreclosures / short sales / etc as (fortunately) no one I know has had any issues in these areas.
But, it sounds like things are getting confusing on your side. If the mortgage company won’t cooperate when it comes to selling the house I’m pretty sure that’s because they are already in the processing of putting the property into foreclosure, so it’s too late to do anything about it.
I 100% think you should go see a lawyer to talk about your options. If your mother’s ex is on the mortgage as well then your mother is only responsible for half the debt. A lawyer will be able to help work this all out.
Post # 11
See if the state that you live in is a “deficiency state”. If it is, then the bank can go after your mom for the difference that the house eventually sells for. As in, if her original mortgage is 200k but the foreclosed house only sells for 100k at auction, then not only did your mom lose the house, she could still be liable for the money. Unless she declares bankruptcy- that is one reason bankruptcy might be an option for her. This is why she should get a lawyer.
Post # 12
Yep, get a lawyer. Once the foreclosure goes through, it will be the only way to protect her wages and/or bank account from being garnished for what is still owed to the bank. I think you already know this, and are just asking if you should have a lawyer do it instead of doing it yourself, and I think yes, you should. There are too many game-changing errors you could make on your own. Leave it to the professionals.