Legal Question in Bankruptcy in Texas

How will our Co-signers Bankrupcy affect us

My husband and I bought a house 2 years ago with my sister. My husbands name is on the mortgage and my sister is listed as the co-signer. Howwever, she lives in the house with us and we agreed to split the mortgage. But recently she started having finiancial problems and is unable to pay her half and is thinking about filing for bankrupcy. We have been paying our portion of the mortgage. My question is how will her bankrupcy and non payment of mortgage affect us and should we file for bankrupcy to even though we are not having financial difficulties. Please advise?!

Thank you

JB


Asked on 11/23/01, 5:46 pm

1 Answer from Attorneys
Cole Fulks Cole Fulks, P.C.

Re: How will our Co-signers Bankrupcy affect us

Is your sister thinking of filing bankruptcy to discharge her mortgage obligation under Chapter 7, or is she looking for some protection from foreclosure while she pays back missed payments (arrears)? This makes a difference as to how your husband will be treated by the mortgage holder.

If your sister is looking to liquidate (discharge) her mortgage obligation, the lien holder is going to pounce on your husband as the "next-in-line" on the mortgage note obligation. If your sister files a repayment bankruptcy under Chapter 13 (assuming she is eligible to do so) there is a "co-debtor stay" that should keep the lienholder from looking to your husband to satisfy the mortgage arrears.

Finally, you can't just file bankruptcy for the thrill of it. You have to meet some fairly specific requirements.

Good Luck. THE FOLLOWING MESSAGE IS PROVIDED AS A PUBLIC SERVICE ONLY, AND NOT AS A COMMUNICATION PROTECTED BY THE ATTORNEY-CLIENT PRIVILEGE.

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Answered on 11/24/01, 12:33 am


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