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cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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If my ex and I are on the title and loan together on our home.

Resolved Question:

If my ex and I are on the title and loan together on our home. If she files bankruptcy will that remove her from the tile and the loan so I can continue the loan modification. The house is currently in foreclosure. It was placed in foreclosure 60 days ago, the foreclosure company said they cannot do anything for 90 days and then there will be a sale date set.
Submitted: 6 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 6 years ago.
Hi JACustomer,
Filing a Bankruptcy does not remove someone's name from a title or from a mortgage. A Bankruptcy can only discharge someone's liability to pay the mortgage.
However, because of the automatic stay - which goes into affect as soon as a Bankrutpcy is filed by anyone on the title or mortgage - the mortgage company will not be able to proceed with the foreclosure process or with the modification process while the Bankruptcy is in progress (unless they get permission from the Bankruptcy court).

I think this is what you wanted to know. If not, please let me know.
Thank you!
Customer: replied 6 years ago.
Would it be worth it in the meanwhile to do a quit claim to get her name off the loan.
My situation is that I would like to keep the house and get my ex completly off the deed and the loan, I am willing to pay for her bancruptcy, I think the total will run about $1500. She owns nothing and the house and about 3 other loans are the only thing that will be considered,.
Expert:  cfortunato replied 6 years ago.
If you and she execute a Quitclaim deed, you can then have her name removed from the title, but not from the loan. The only way to have her name removed from the loan is with a re-finance.
Again, you will not be able to proceed with a modification while the Bankruptcy is in progress - unless the mortgage company files a motion asking the Bankruptcy court's permission to proceed. The mortgage company will not do this for a modification, because it is costly.
In other words, I don't see how your ex-wife's filing of a Bankruptcy will help you to save the house.
cfortunato and other Bankruptcy Law Specialists are ready to help you
Customer: replied 6 years ago.
My though was that the quit claim would remove her from the title and allow me to modify the loan as I am the only one working and would qualify for the loan. She is refusing to sign the quit claim because it does not remove her from the second mortgage as well.

The house is worth $310,00 the first is $313,000 plus the fees for not making a payment on the house in a year. The second has a balance of about $200,000 and that is not going to be satisfied at all at this time, I will need to wait that one out.

If this was your situation, what would you do? I'm torn on which way to go, on one hand I want to pay for her bankruptcy so she can get off the paperwork so I can proceed, and keep the house because at this point I want to keep it as an investment because I'm renting it out. Or should I just walk away and be done with this.
Expert:  cfortunato replied 6 years ago.

If she will not sign the Quitclaim deed, you cannot remove her name from the title.

I'm not sure that a modification will really help you, as the result of most modifications is a modest decrease - usually around $100 - in the monthly payment, with up to 10 years added to the mortgage term. This means if you cannot pay the mortgage now, you will probably not be able to pay it after the modification.

And you will eventually have to deal with the second mortgage, which will also be able to foreclose once the balance of the first mortgage falls below the market value of the house.

Have you thought about filing a Chapter 13 Bankruptcy to strip the second mortgage?