Legal Question in Bankruptcy in Illinois

Wife filing bankruptcy following our divorce

Have been meeting with my Illinois banker. I wish to take out a home equity loan due to divorce issues. My wife is ready to do a ''quick claim deed'' off the title of our home. I will keep the home in my name, however by keeping the same morgage with a home equity loan her name will still be on the mortgage. When she eventually files for bankruptcy, will I, my credit, or my home be affected by her action? I really need to know this.


Asked on 6/28/07, 1:34 pm

1 Answer from Attorneys
Lesley Hoenig Lesley A. Hoenig, Attorney at Law

Re: Wife filing bankruptcy following our divorce

It is really best to refinance the house when she quit claims the house to you, so you can get her off the mortgage. Be sure that before she files for bankruptcy that the judgment for dissolution is entered and that it states that the house is given to you in the divorce as a transfer of property within 5 years of filing bankruptcy can be deemed a fraudulent transfer. Also, if there is equity, you are going to have to pay wife her share of the equity (unless there is some valid reason why the equity isn't being paid to her as part of the divorce settlement), which could effect her ability to file bankruptcy without the trustee liquidating assets. If she remains on the house, I am not totally sure it will effect your credit, but I think it is possible, especially if you aren't current on the mortgage.

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Answered on 6/28/07, 7:51 pm


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