How Does Bankruptcy Affect a Home Co-Owner's Credit

[jnl]

My question involves bankruptcy in the state of: California
My mother is considering filing for Chapter 13. She's on the edge of letting her house go because she can no longer afford it. My question is, if she do decide to file Chapter 13, her being the home ownder & me as co-owner, would it effect my credit too?

[jk]

are you on the mortgage as well as title? Do you intend on continuing payments on your own?

[flyingron]

The verb is affect.

To expound on JK, if you are on the mortgage, her bankruptcy doesn't help you at all. You're 100% liable for the whole loan. If the payments aren't made for whatever reason, it will trash your credit. If you're an owner but not on the note and nobody pays the mortgage, the property will be foreclosed. You'll be named in the foreclosure suit (if it comes to that) but it won't harm your credit.

[jnl]

jk & flingron: I appreciate the reply. My mother is seriously considering filing chapter 13 but is in need for some desperate advice. My name is on the mortgage as well as title. She thought about transfering the mortgage & title over to my sister & her husband whom are currently living with her & their 6 kids. I have no problem with that because I'm living with my fiance. I don't want any part of the house because I have my own family to support & take care of. My mother is not working due to a serious illness. However, she does receives source of income from my father & younger sister death insurance. Her incoming funds is not enough to pay for the mortgage but my sister works & gives her a portion to help with other household bills & yet, not enough to put food on the table. My sister's husband has recently been laid off & currently trying to look for another job. My mother strongly feels that she can no longer afford it & don't want to live the rest of her life struggling. I would greatly appreciate any advice or suggestions.

[jk]

she and you cannot transfer title while the house is security for the mortgage unless the lender approves. From the work, or lack of work, situation, that sounds like it might be a problem. If there is any equity in the home, it could be a problem with a bankruptcy. You cannot simply give away an asset shortly before a BK. It will come back to bite her.

[KeyWestDan]

No, she can't transfer the house to anyone. Not a chance.

If the house is the only debt, it would be seriously dumb to file bankruptcy at this point.

Also, it would not cover things that will happen in the future. Better to wait and see what happens with the house.

[llworking]

jk & flingron: I appreciate the reply. My mother is seriously considering filing chapter 13 but is in need for some desperate advice. My name is on the mortgage as well as title. She thought about transfering the mortgage & title over to my sister & her husband whom are currently living with her & their 6 kids. I have no problem with that because I'm living with my fiance. I don't want any part of the house because I have my own family to support & take care of. My mother is not working due to a serious illness. However, she does receives source of income from my father & younger sister death insurance. Her incoming funds is not enough to pay for the mortgage but my sister works & gives her a portion to help with other household bills & yet, not enough to put food on the table. My sister's husband has recently been laid off & currently trying to look for another job. My mother strongly feels that she can no longer afford it & don't want to live the rest of her life struggling. I would greatly appreciate any advice or suggestions.

The bottom line:

Her bankruptcy will not effect your credit as long as SOMEONE continues to pay the mortgage, consistently and on time. Her bankruptcy WILL effect your credit if the mortgage goes unpaid.

jk & flingron: I appreciate the reply. My mother is seriously considering filing chapter 13 but is in need for some desperate advice. My name is on the mortgage as well as title. She thought about transfering the mortgage & title over to my sister & her husband whom are currently living with her & their 6 kids. I have no problem with that because I'm living with my fiance. I don't want any part of the house because I have my own family to support & take care of. My mother is not working due to a serious illness. However, she does receives source of income from my father & younger sister death insurance. Her incoming funds is not enough to pay for the mortgage but my sister works & gives her a portion to help with other household bills & yet, not enough to put food on the table. My sister's husband has recently been laid off & currently trying to look for another job. My mother strongly feels that she can no longer afford it & don't want to live the rest of her life struggling. I would greatly appreciate any advice or suggestions.

Your mother should simply sell the house rather than filing for bankruptcy. That would make a lot more sense.

[PayrolGuy]

The bottom line:

...is that you got sucked in by the SPAM bot.

[llworking]

...is that you got sucked in by the SPAM bot.

I hate it when that happens.

[flyingron]

Twice in the same freaking thread. Is there anybody alive at ExpertLaw? Why doesn't someone delete Katy's account.