Legal Question in Bankruptcy in Indiana

Mortgage Codebtor and quitclaim deed

Ex-fiance and I bought a house together in 1993. In 1995, he moved out and gave me a quitclaim deed but his name remains on the mortgage. I fell behind on payments in Nov of last year. (Injury)

Now the balance on the mtg is 59000; arrearage and atty fees equal 6000; appraisal 18 months ago=71000;

original purchase price 68392.

1. If I file chapter 7, will he get the house and get to keep ALL the equity in the house?

2. If I bring the mortgage current and do not file for more than 90 days... will I be able to exempt the property? (assuming a value of 72000-59000=13000...will the court assume that my equity is 6500?)


Asked on 7/06/01, 4:28 pm

2 Answers from Attorneys
C. David DuMond Law Offices of David DuMond

Re: Mortgage Codebtor and quitclaim deed

If you have a valid quitclaim deed, conveying his interest to you, then he no longer has a legal interest in the property. If he is required at some point to continue making payments on the mortgage, then he may be able to assert some sort of equitable interest in the property, but this is a fairly remote possibility. In bankruptcy, you will be able to claim the entire interest in the property, but you will have to continue making mortgage payments.

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Answered on 7/07/01, 8:28 am
Dorene Philpot Philpot Law Office

Re: Mortgage Codebtor and quitclaim deed

If you file for bankruptcy protection and his name is on the loan, then he is responsible for the loan.

The quit claim deed means he gave up all RIGHTS to the house, which is an agreement between the two of you, but he still has a liability on the loan, if he co-signed it with you. That's because that's an agreement he had w/the bank.

In order to reaffirm on the loan and keep the house in a bankruptcy, you would have to be current on the loan, and up to $7,500 in equity would be exempt.

Hope this helps. Let me know if you have other questions.....

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Answered on 7/07/01, 3:46 pm


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