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Dimitry K., Esq.
Dimitry K., Esq., Attorney
Category: Legal
Satisfied Customers: 41221
Experience:  Multiple jurisdictions, specialize in business/contract disputes, estate creation and administration.
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My brother and 82 year old mother purchased a home in 2008

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My brother and 82 year old mother purchased a home in 2008 (mother is co-borrower, retired and is on social security). They began to have problems paying the $1,267.00 mortgage in August of 2011 and at this time, the bank offered them a forbearance twice during the months of August to February. My mother and brother paid the agreed forbearance amount, but when that period was over, they failed to pay the original payments for that period and stopped payments completely in February of this year due to brother moving out and mother unable to carry mortgage alone. The lender sent letters for request of delinquent payment in the amount of $8,000. My mother relocated to a rental home and my brother has also left the home completely and is renting an apartment.

On April 24, 2012 my brother informed my mother that he had filed Chapter 13 to cover all creditors he owe and had included the house they co-own. He also informed her that $175.00 will be deducted from his pay check bi-monthly for the next five years to pay his creditors. His lawyer assures my mother that she has nothing to worry about because she receives government aid (retirement benefits & social security).

My mother called today to inform me that she has received two letters regarding this matter. The first letter dated April 11, 2012 is from a debt collector who has taken over the mortgage account. The letter is asking that my mother make arrangements to pay the total amount of the home ($173,000) she and my brother co-own. The second letter is dated April 24, 2012 and is a notice of my brother's Chapter 13 filing.

My other siblings and I just learned of all this and are very much concerned about our mother in this matter. Her income consists of monthly retirement and social secuity benefit checks. Can she be held liable for any/all balances owed on the home?
Submitted: 5 years ago.
Category: Legal
Expert:  Dimitry K., Esq. replied 5 years ago.
Thank you for your question.

I am sorry to hear that your mother is in this type of a situation. To answer your question, your mother IS liable for the debt. The simple reason is because she is a formal co-borrower on the property. However, and this is why this is a bit of a positive, most likely your mother is "judgment proof", meaning that it will cost the creditors far more to pursue her for the debts than they will be able to collect. Furthermore pensions and government aid are generally exempt from most creditors (tax and back child-support tend to be able to be pursued). So while this is a very valid and large debt, most likely they will not be able to obtain it.

Good luck.
Customer: replied 5 years ago.
Thank you very much for your assistance. I gather from your response that it is not definite that she is "judgment proof" therefore, do you recommend she seek further legal advice? We have heard that banks/lenders exercise other means to attempt collection from those who receive government aid; such as freezing accounts of the liable person. And in the event of her passing; will the executor of her will be held responsible for this debt,sir?
Expert:  Dimitry K., Esq. replied 5 years ago.
Thank you for your follow-up.

Please permit me to answer last question first and first last. No, the executor of the will is NOT held personally liable for the debts--he would have to figure out a way to formally pay off as many creditors as possible, but he personally is not responsible for the fees and costs. As for obtaining "legal advice", that is always suggested because a local attorney can review her asset portfolio if any, and see what may be vulnerable, and what may not be vulnerable. Getting an additional opinion never hurts since the more you know the easier it may be to make a decision.

Good luck.
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