What are my daughter's options for her marital home if her ex husband is filing bankruptcy?
Full Question:
Answer:
A divorce decree may determine who is liable for a mortgage payment, but doesn't automatically remove a person's name from a mortgage. The lender holds the borrower responsible for the duration of the mortgage. A person who takes out a loan such as a mortgage remains responsible for payment unless the contract is changed. In the case of a divorce, a person will have the debts and assets divided. Although the court may order one party to be responsible for payment of a debt, it is often the case that the lender will seek to recover from any party who signed the loan, leaving the other party to seek enforcement of the court order by way of a motion for contempt.
To transfer financial responsibility for a mortgage to another, the mortgage may be able to be assumed. Many mortgages are not assumable, but the larger the amount of equity in the property and the better the credit history involved, the more likely the lender is to allow the mortgage to be assumed. Another option is to refinance the property into only one individual's name. This is typically done by way of a second mortgage.
