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Roger, Attorney
Category: Bankruptcy Law
Satisfied Customers: 31770
Experience:  BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters
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Can a joint debt such as a mortgage be included in a chapter

Resolved Question:

Can a joint debt such as a mortgage be included in a chapter 7 bankruptcy if only one of the parties files?
Submitted: 7 years ago.
Category: Bankruptcy Law
Expert:  Roger replied 7 years ago.
Yes, such a debt can be included. However, only the one that files bankruptcy will be relieved of the debt. The non-filing person will still be responsible for the mortgage.
Customer: replied 7 years ago.
What if the parties are divorced and the marital home was awarded to the person filing the bk? The mortgages in question were never refinanced. Both liens in question are listed on the financial statement of the person filing.
Expert:  Roger replied 7 years ago.
None of those things effect the lender's lien rights and those who signed the note. Unless the lender releases either one of them, or unless they both file bankruptcy, the debt will still be outstanding and collectible.
Customer: replied 7 years ago.
So, in a nut shell, even though the divorce decree assigns the home and the related debts to one party, the other party is still legally responsible for the note until such a time as it is paid off. Does the divorce decree have no bearing on this?
Expert:  Roger replied 7 years ago.
Yes, that is right. However, the divorce decree does have some bearing on this. If the spouse relieved of the debt in the divorce decree ends up paying on behalf of the other spouse, he/she can sue and recover any money paid out from the other spouse under the terms of the decree.
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