Bankruptcy Law Questions? Ask a Bankruptcy Lawyer Now.
Does the divorce decree say the ex-spouse is liable for any shortfall?
1) The spouse who filed a Bankruptcy is entitled to 1/2 of the proceeds from the sale of the house, pursuant to the divorce decree. This is because divorce proceedings are expressly not affected by a Bankruptcy filing. Bankruptcy Stat. 362(a)(2).
2) No - the spouse who filed the Bankruptcy cannot be held liable for any shortfall. However, if there is a mortgage, the house cannot be sold for less than the balance of the mortgage, unless the mortgage company approves the sale (called a short sale), which can result in a forgiveness of the liability for the short sale for both parties.I think this is what you wanted to know. If not, please let me know.Thank you.