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Ask Terry L. Your Own Question
Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2884
Experience:  Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
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I was divorced 3 years ago and in the property settlement agreement,

Customer Question

I was divorced 3 years ago and in the property settlement agreement, I was to retain the marital property and resume all debts associated to the property. I was recently notified by my lender that my ex-spouse filed chapter 7 bankruptcy and included the marital home. I am being told by the lender that I have to get the mortgage re-affirmed out of bankruptcy even though I have never filed for bankruptcy. As a result of his filing, I am not eligible to refinance my home. Please advise.
Submitted: 4 years ago.
Category: Bankruptcy Law
Expert:  Terry L. replied 4 years ago.

Terry L. :

Hi, thanks for your question. You should hire a lawyer for specific legal advice. No attorney client relationship is created here.

Terry L. :

Only the debtor who files bankruptcy can reaffirm on the mortgage

Terry L. :

Are you on the title to the home and are you on the mortgage loan?

JACUSTOMER-rpzu9ye7- :

Yes

Terry L. :

You should have the home quitclaimed into your name

JACUSTOMER-rpzu9ye7- :

Can that still be done even if the mortgage is claimed in his bk

Terry L. :

Since you are on the loan, you should be able to refinance it once his bankruptcy case is discharged.

Terry L. :

the case basically takes him off of the loan only.

Terry L. :

You should show the lender a copy of the settlement agreement and his discharge to help facilitate a refinance

Terry L. :

Are you trying to refinance now?

JACUSTOMER-rpzu9ye7- :

Apparently not according to the lender. They're telling me that he has to reaffirm the mortgage. I don't have a copy of his discharge, but the bk attorney must have notified the lender that his bk was discharged. I had reached out to my lender to inquire about refinancing and was given this information

Terry L. :

The bank gets notice of filing and of the discharge

Terry L. :

You may want to use another bank then

Terry L. :

The lender doesn't have to let you refinance

JACUSTOMER-rpzu9ye7- :

I have been the individual making the mortgage payment before and after the divorce. They are continuing to accept the monthly payments

Terry L. :

I understand

Terry L. :

that is common

Terry L. :

your best bet is to keep making the payments, since you are on the loan too.

Terry L. :

Reaffirming keeps the debtor on the hook for the loan

Terry L. :

he'll unlikely want to, and it isn't required.

Terry L. :

you still have the settlement agreement to keep the home, that won't change.

Terry L. :

Your best bet if you want/need to refinance is to use a different lender.

Terry L. :

If you really want to use your bank, try to speak to a senior mortgage specialist to relay your situation.

Terry L. :

If you have any other questions, please let me know

Terry L. :

thanks