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cfortunato
cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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I love in NY was divorced in 9/11 and my ex filed for bankruptcy

Customer Question

I love in NY was divorced in 9/11 and my ex filed for bankruptcy in 12/11. He makes 135K a year and I make 75K.
We have a mortgage with a balance of 600K and the house is valued at about 500K. It has been for sale for a year now with no offers. The mortgage has not been paid since 1/11 but it has not reached foreclosure yet and I am living in it.
I have about 25K in credit card debt. A car lease that ends in 3/12 and 80K in student loans.
Questions:
1. My ex put the house in his bankruptcy so now it all falls on me. Is there a way to get around this so I dont have to claim bankruptcy also?
2. Once the house forecloses, how much will I (I assume its not we) have to owe? Are we talking a couple of thousands or hundred of thousands? What happens if I cant pay that amount? Does it get wiped away or am I forced to file bankruptcy?
3. Assumming I will have to file bankruptcy, how long before I can buy a new home? Will I be able to lease a new car with this since my current lease ends in 3/12.
4. Do I have to not use my credit cards for a period of time before I can file?
Will I be able to keep any of my zero balance cards?
5. How much cash can I keep in bankruptcy? Will I lose all of my jewelry?
6. Am I better to file bankruptcy now so that I can get it wiped off my record sooner, or to wait till the house forecloses and then file which will just keep it on my record that many more months?
Thanks.
Submitted: 2 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 2 years ago.
Hi JACustomer,
Have you been trying to sell the house for what it is currently worth ($500K), or for the balance of the mortgage ($600K)?
Customer: replied 2 years ago.
It was originally listed at 630 and has been listed at 550 for over 6 months.
Expert:  cfortunato replied 2 years ago.
1) Your other option is a Short Sale - whereby the mortgage company allows the house to be sold for the current market value ($500K) instead of the balance on the mortgage, so that you will be responsible for the mortgage balance.
2) If the house forecloses, instead of being sold in a Short Sale, the mortgage company can get a deficiency judgment for the balance of the mortgage after the house sells at a foreclosure auction. However, there is no way to know in advance how much your house would sell for in a foreclosure auction.
3) If you file a Bankrutpcy, you can buy a new home right away - there are no restrictions on this. However, you will have to pay a higher interest rate for your mortgage. The interest rate you will have to pay should start going down around one year after filing.
It will be harder to lease a car after filing a Bankruptcy.
4) You are allowed to keep up to around $11,000 in any property - including cash and jewelry.
5) It may be a good idea to wait to see if you can sell the house if you start asking considerably less so that you can Short Sell the house. If you can Short Sell the house, you will not have to file a Bankruptcy. Also, if you wait, you will not have to worry about leasing another car after March.

I think this is what you wanted to know. If not, please let me know.
Thank you.
Customer: replied 2 years ago.

Will I be responsible for the deficiency judgement or is there a way to have my ex pay part of it also even though he claimed bankrupcty?

Expert:  cfortunato replied 2 years ago.
Did your divorce decree address the mortgage?
If yes, how did your divorce decree handle the mortgage?
Customer: replied 2 years ago.
It stated that I was responsible fro 1/3 and him 2/3. But my lawyer stated that by him filing bankruptcy that it now all mine. He also was suppose to pay me 16K for credit card debt and part of his stocks, and my understnading is that I cant get any of that either.
Expert:  cfortunato replied 2 years ago.
Given the information you provided, your ex-husband's liability to pay his share of the mortgage can be discharged in his Bankruptcy. As there was never an obligation to pay you (he only had to pay the mortgage company), it is not possible for your ex-husband to become liable for any deficiency judgment.
Expert:  cfortunato replied 2 years ago.
Given the information you provided, your ex-husband's liability to pay his share of the mortgage can be discharged in his Bankruptcy. As there was never an obligation to pay you (he only had to pay the mortgage company), it is not possible for your ex-husband to become liable for any deficiency judgment.

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