Legal Question in Real Estate Law in New York

The first issue to consider in answering your question is whether or not you father is on the Mortgage and Note, or just the deed. If he is on the Mortgage and Note, his bankruptcy will trigger an acceleration of the loan, meaning the bank will try to call in the loan to get it paid off. The automatic bankruptcy stay will prevent this action by the bank in the short run. If your dad is not on the mortgage then his bankruptcy will not effect the existing Mortgage and Note. Ownership of the property by your father however, may effect his ability to get a discharge in Bankruptcy Court depending on the value of the house and the type of relief he seeks whether under Chapter 13 or 7.

As for your inability to pay the Mortgage and Note, that will surely effect your credit rating and cause the house to go into foreclosure unless you're able to refinance it before the loan becomes delinquent. Try to refinance at a lower interest rate with a lower monthly payment you can afford. If not, then consider a short sale or if you want to keep the house, then you must fight the foreclosure case in court. If the mortgage loan was securitized by the bank that originated the loan there may be legitimate defenses you can assert. Most likely however, a 2010 mortgage loan will not suffer the defects found in older mortgages and there may be no technical defense available to you to fight the foreclosure case. The typical defense surrounds the bank's lack of standing, which refers to the bank's ownership of the Mortgage and Note.

If your father's name is on the deed and not on the Mortgage and Note, and the deed was filed prior to the re-financed Mortgage and Note, then the bank may not be able to sell the house or evict your father as long as your father occupies the house. I have heard of such title errors complicating foreclosure proceedings. In all events, you should seek the help of a knowledgeable attorney before your father declares bakruptcy. Make sure that the attorney also understands how to defend a foreclosure action in addition to knowing how to file a bankruptcy petition. Hope this helps.