Legal Question in Bankruptcy in Michigan
Mortgage Loan facing bankruptcy
What happens when there are 2 people listed as the mortgage holders, and one of them files for bankruptcy? Is the other person just stuck with property? If the bank is foreclosing on that property, won't they still foreclose and charge the debt to both parties?
Curious and worried
1 Answer from Attorneys
Re: Mortgage Loan facing bankruptcy
Foreclosure can still happen if one party files bankruptcy, BUT it is stayed temporarily if it is a chapter 7. If one party files a chapter 13, it stays proceedings against both parties, and can have a lasting effect, if the goal of the filing party is to get current on the mortgage.
If there is a foreclosure and one person files bankruptcy, the one that filed, is no longer liable. The mortgage company has no recourse against them other than foreclosing on the house.
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