My question involves a mortgage in the state of: FL
The situation is a bit complex but I think the questions are straight-forward. I'm hoping to get a grasp on things to decide how to proceed. Husband and wife own a home in FL. There is a 1st mortgage for $115k and a 2nd for $50k, while the house is currently worth around $105k. The husband filed BK7 and included both loans. The wife did not file. The payments were current and the house is basically a ride-through. Something has come up and they need to move across the country. I know the wife is still responsible for both loans. There have been efforts to settle in exchange for releasing the 2nd lien and satisfying the note, but those have not gotten very far yet. If this happens, it's reasonable that the house could be sold the "old fashioned way" and some cash could be brought to closing to shore up the 1st. For now, payments have stopped on the 2nd and the 1st will be kept current. However, we are now planning for the worst case scenario. Say that the 2nd does not budge and the owners walk...
Is it true they can sue the wife for the deficiency on either or both loans, but the husband is in the clear?
Can the 2nd sue while the 1st is kept current? Must they foreclose before doing so?
Is it less/more likely that they will pursue for smaller amounts and is there a theoretical threshold?
Is settlement typically possible before the judgement? After the judgement?
What are the long term consequences for the wife? I think that, if they pursue a judgement, it's good for 5 years and can be renewed for another 5. Is that correct? They can garnish wages, seize assets, etc (there are no assets really but she wouldn't qualify for a BK7 now due to combined income).
If they do go this route, how would this work considering the husband was discharged BK7? Is there a fine line between trying to collect income and assets from the wife and violating the permanent stay for the husband?
If after moving the wife is unable to find work and has no major assets, is she essentially judgement-proof? Is it reasonable to wait it out at that point?
And one final thought/question... they do not seem to be aware that only the husband filed. Both mortgages reported the account as included in BK for the husband and wife. No reporting has occurred since the discharge and no calls or communication have been initiated thus far by the 2nd. Is it possible that this continues to go unnoticed?
Thanks so much for reading. Obviously I've been mulling this one over a while hoping to make the best decision.