Posted on: 17th Apr, 2009 07:28 pm
I was a third signee on my parent's mortgage on their home. Recently my dad passed away. My mom cannot afford to keep the home. They have borrowed more than the house is worth and the home is in disrepair. My questions are 1) can she file bankruptcy and turn over the home and what reprocussions are there, 2) I own a couple of properties of my own; will they put liens on my property to satisfy the note; 3) Would I have to file bankruptcy too and lose my properties 4) Do I have any liability at all. What is my best course of action? Thanks
#4 first...yes you do - you are a borrower, right? that means you're obligated to make payments; further, as an owner you're obligated to uphold the property that has a mortgage on it, so that means you ought to repair the home. #3 - you don't have to file for bankruptcy or lose your other properties if you don't want to. #2 - i'm pretty sure a lender isn't going to try to place liens on your other properties; #1 - yes she can and yes she can; and to whom would she "turn it over"? to the lender? to you? repercussions? you're still obligated.
Thank you for the response. I guess the issue really comes down to this...she only gets social security for herself now, but she has two mortgages and a line of credit on the home. I was the third signee on the home many years ago to help them get the house. However, due to illness they were unable to stay in the "black" each month, causing them to borrow just to make monthly bills. In 20 years with little repairs and high balances, she already owes more on the house than it is worth (by a factor of two) and it would cost that again to do all of the repairs. At her age she would be better suited to live in an apartment and let the house go back to the lenders (via bankrupcy, whatever). I do not want the property and do not have the resources to make monthly payments and put many tens of thousands of dollars in repairs into it. My concern is that if she files bankrupcy and forfeits the home, since my name is on it as well, what happens to the house then? I'm wanting to help my mom, but I'm not wanting to lose everything I have to do it if you know what I mean.
"losing everything you have" ought not to be the case. will you suffer from a credit standpoint? yes, that's going to happen. can you demonstrate the reasons for the issue? yes, you can. so your suffering shouldn't be long term in nature.
for your mom to file bankruptcy may not be necessary; of course that depends on her overall financial picture. consult with a bankruptcy lawyer.
dispensing with the home and the mortgage may be done with a deed in lieu of foreclosure, a short sale, or even allowing the home to go to foreclosure (worst case). again, having a lawyer's input is critical in this situation.
for your mom to file bankruptcy may not be necessary; of course that depends on her overall financial picture. consult with a bankruptcy lawyer.
dispensing with the home and the mortgage may be done with a deed in lieu of foreclosure, a short sale, or even allowing the home to go to foreclosure (worst case). again, having a lawyer's input is critical in this situation.