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Joint Mortgage, Bankruptcy - Indiana

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  • Joint Mortgage, Bankruptcy - Indiana

    These things are hard to keep brief but I will do what I can. I'll give a brief overview of the situation followed by a few questions.

    I owned a house with my ex-fiance (never married). There were two mortgages on the house:
    1) Primary through Bank of America (now owned by NationStar): $94K
    2) HELOC through Charter One: $25000

    Long story short, it was a messy break up, she ended up living in the house for about 1.5 to 2 years after the break up. I decided I needed to move on with my life and quit paying on the house entirely to force her to move out. The mortgage has been in delinquency since August 2010 I believe. Short Sale was attempted on the property but a price could not be negotiated between the potential buyer and Bank Of America. A foreclosure case was opened by Bank Of America sometime in the last year action code was: E-Filing Foreclosure - Mortgage - HA (if that means anything). The case was closed but I can't find the PDF with the ruling. I can get this if this is important.

    Fast forward to now. Here are the statuses of the two loans:
    1) Charter One: They wrote of the $25K as bad debt. It is in the hands of their lawyers right now. I have the law firms number but have not called yet.
    2) Nation Star: The account has a status of Active in Bankruptcy. My ex has filed for Chapter 7.

    Here are my questions:
    1) I've called NationStar on two separate occasions and received the same response from different people. I asked what is happening with the loan. They said that since it is Active in Bankruptcy, I will have to wait on the determination of that case. They said that if the Bankruptcy is discharged that, essentially, the debt is gone. I said that I'm not the one filing bankruptcy but they said that since she is, and because both our names are on the loan, that the debt would be discharged for me as well. They were both adamant about this. Is this correct for Indiana Law? I contacted a lawyer that is a friend of a friend and they don't know how that could be the case because of "joint and several liability". She does not know Indiana law however and said to seek additional advice on this.

    2) With the Charter One Loan, now that it is in the lawyer's hands, do you know what the typical outcomes are in these instances? Will they most likely sue me for the debt? I'm a little apprehensive in calling because for starters, I don't know the terminology well and feel they're going to be talking over my head. Secondly, I don't want to bring un-needed attention to my case. Additionally, how does this play out with the first mortgage? I was under the impression that the process was: Delinquency -> Foreclosure -> Sheriff's Sale -> Possible lawsuit for Deficiency (Loan minus the sale of house). It seems like the Charter One HELOC loan is being treated separately.

    3) What should I be doing right now? My biggest concerns are wage garnishment and potentially filing for bankruptcy. I want to be ready for whatever can potentially happen rather than reacting to everything. My ex's bankruptcy case is 88 days in.

    Any advice would be greatly appreciated. I can give additional details as needed.

  • #2
    Someone else may come along with some additional information/suggestions for you but I believe your best bet is to work with a/your lawyer.
    Too often we underestimate the power of a touch, a smile, a kind word, a listening ear, an honest compliment, or the smallest act of caring, all of which have the potential to turn a life around. Leo Buscaglia

    Live in peace with animals. Animals bring love to our hearts and warmth to our souls.


    • #3
      You need to have a lawyer review your loan docs in light of your state's laws. But I agree, that her bankruptcy probably doesn't wipe out your debt obligation, but the foreclosure will, unless it is a recourse loan, which the 2nd loan may have been. Again, you need to get an attorney to review the mortgage or deed of trust paperwork.
      I am not an attorney, and don't play one on TV. Any information given is a description only and should be verified by your attorney.