Reaffirming Mortgage of a Home Co-Owned With Ex-Husband
My question involves bankruptcy in the state of: Oregon
My sister in Oregon is considering filing for Chapter 7 bankruptcy due to credit card debt ($40K). She is a independent contractor who works in the web application industry. Needless to say, she can barely pay her rent, utilities, etc. and was served by the sheriff's office two weeks ago with a notice of suit from one of her credit card companies. If she does indeed proceed with her bankruptcy, I will more than likely handle the paperwork for her...I have previously helped a family member with their Chapter 7 filing.
She lives in an apartment; however, she also is a co-owner (mortgage and title) of a house that her ex-husband and current wife live in. The ex-husband is well aware of her desire to file for Chapter 7. My questions are as follows:
- She does not want to reaffirm the debt on the house (she refinanced the house with her ex-husband last year, and regrets it since). If the ex-husband keeps the monthly payments current, as they are now, will the bank (Wells Fargo) seize the house...due to not reaffirming? Or do they just care about the payments being current? I realize if she does not reaffirm, the "lien" on the house still exists.
- Since she is a co-owner (mortgage and title) of the house, what percentage of the house's value should she put down on Form B6A where it asks for CURRENT VALUE
OF DEBTOR’S INTEREST IN PROPERTY, WITHOUT DEDUCTING ANY SECURED CLAIM OR EXEMPTION.
- RE: Form B1...does she have to inform her apartment complex of her bankruptcy filing? She is current on her rent, and has been so for the last four years.
- RE: Individual Debtor’s Statement of Intention. This form asks me if the property will be retained or surrendered; moreover, if the property will be retained it gives the following options:
- Redeem the property
- Reaffirm the property
- Other. Explain (for example, avoid lien using 11 USC §522(f))
- I would assume she will claim the property as exempt. I believe they (her and ex-husband) have roughly $30K in equity in the house.
Thank you for any help!
Re: Reaffirming Mortgage of a Home Co-Owned With my Ex-Husband
At first I was going to try to answer your questions. That ended when I read this. . .
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I would assume she will claim the property as exempt. I believe they (her and ex-husband) have roughly $30K in equity in the house.
You (and more importantly, your sister) better not assume anything. The best advice you can give to your sister is to seek out the assistance of a well qualified attny.
The house IS NOT her residence and therefore probably IS NOT exempt as to her interest in the property. If your sister files a 7 without fully understanding what is or is not exempt she can kiss her interest in the home goodby. Worse yet, the Trustee can force a sale of the property and her ex is out in the cold (although he will get half of the net proceeds).
Sorry to be blunt about this but since you are not an attny and are asking such questions I have to assume you have no idea how Oregon exemptions work. Your sister should look at Oregon Revised Statute 18.395 and any other one that might apply and discuss them with a local attny before jumping into a bk.
Des.
Re: Reaffirming Mortgage of a Home Co-Owned With my Ex-Husband
Well, I told her she should probably go see an attorney. She's got 95% of the non-housing forms already completed, along with the pre-filing class...so, it seems like not a lot of work for whatever attorney she chooses.
Re: Reaffirming Mortgage of a Home Co-Owned With my Ex-Husband
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Quoting
rainier10
Well, I told her she should probably go see an attorney. She's got 95% of the non-housing forms already completed, along with the pre-filing class...so, it seems like not a lot of work for whatever attorney she chooses.
I am glad you recommending seeing an attny. Sorry if I came off too strong. I just wanted to "scare the crap out of you" to make sure your sister did not end up in a pickle.
I do not know what the average cost of an attny in Oregon is. There is nothing wrong with shopping around but don't pick the cheapest just for that reason. Your sister should pick the attny she feels most comfortable with and the overall cost should be secondary.
Best of luck.
Des.