Author Topic: Bankruptcy and dealing with ex-husband  (Read 391 times)

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Princessjas

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Bankruptcy and dealing with ex-husband
« on: April 20, 2017 04:28:00 PM »
Hello, I filed for bankruptcy this month. My name is still on the mortgage for a rental property that I had with my ex-husband. 

We have bren divorced for 3 1/2 years.  In our paperwork from the divorce, it states that I have no interest in the property, he is to assume full ownership of the house and I did a quick claim deed to him.  It also states that he would refinance it to remove my name but he can't since it is upside down on the mortgage.


When I filed bankruptcy,  I showed my divorce papers and asked my attorney if it would affect him in any way. They said no, my name would be taken off of the mortgage.


I called the mortgage company today and they said the house is in bankruptcy. I need to the reaffirmation agreement to have it taken off. So the bankruptcy is going to also show up in his credit report. He was going to try to assume the loan but has been dragging his feet on the paperwork and I got tired of it and filed for chapter 7.


I am panicking, I am afraid of what my ex is going to do since the mortgage company said the bankruptcy will show on his credit report.  He said he would have to take action if my bankruptcy affects him in any way.  They said he isn't notified, but if he checks his credit report it will be on it.

If my attorney files the reaffirmation, will the bankruptcy disappear from that mortgage? That is what the mortgage company said. How long does this process take? 

My ex is not someone who is willing to work with me on this and I genuinely am afraid of what he will do. Had I known that it would be on his credit report I would have put the filing off.  I know that I should not do the reaffirmation because I am then reaponsible for the debt, but we share custody and he can and will make our lives difficult on purpose.

fisthardcheese

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Re: Bankruptcy and dealing with ex-husband
« Reply #1 on: April 20, 2017 09:44:15 PM »
First, any college flunky working as a paper pusher for a mortgage company doesnt know a single thing about how credit reports work.  They may report the mortgage as "in bankruptcy" on the TL, but that is different than reporting a full bankruptcy on someone's credit report. That couldnt legally happen since your ex would have no bk case in his name.

The way I see it is he violated the divorce settlement by not removing you from the obligation of the proprty fully.  If he could not refinance to remove your name, he should have sold it.  Now, 3 years later you should be able to take action to enforce the divorce agreement, which includes this bk action.

Your attorney should have explained this to you.  If you need a better opinion, maybe you could get a consultation from your divorce attorney that helped get the settlement in place to begin with.
11 Arb Settlements (9 AAA, 2 JAMS)
3 JDB Suits Dismissed With Prejudice (2 pro-se, 1 consumer atty)
3 TCPA Settlements (2 pro-se, 1 consumer atty)
2 FCRA Settlements (consumer atty)
1 FDCPA Settlement (w consumer atty)
1 Small Claims Win (pro-se; Landlord/state consumer law violations)
1 State UDAP Settlement (ITS)
1 Federal PTC Settlement (before hearing; pro-se)

BrokeBob

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Re: Bankruptcy and dealing with ex-husband
« Reply #2 on: April 21, 2017 12:08:50 AM »
fhc,

I think the OP was worried about how this would have an effect on the relationship with her ex, as far as custody, etc.

In that case, the people on this forum would be unable to help.  An attorney can help with the legal issues.  The BK or divorce attorney can help, if anyonet. 

Nobody on an anonymous forum can tell you how to deal with a person we never met, sorry to say. 

Princessjas

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Re: Bankruptcy and dealing with ex-husband
« Reply #3 on: April 21, 2017 04:47:20 AM »
I guess I stressed a little too much on the personal aspect, I am wondering how and if it would affect his credit.

Bruno the JDB Killer

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Re: Bankruptcy and dealing with ex-husband
« Reply #4 on: April 21, 2017 02:16:52 PM »
Who cares about his credit? If he's such a peach, why did you divorce him? Start looking out for your own interest, not his.

When I filed bankruptcy,  I showed my divorce papers and asked my attorney if it would affect him in any way. They said no, my name would be taken off of the mortgage.

Really? Your lawyer doesn't have the authority to tell you that unless he has something in writing from the lender. I doubt any bank will gleefully remove you from the note unless your ex qualifies for a loan on his own. More likely they'll sue the both of you if there is a deficiency. Your divorce decree means absolutely nothing to a mortgage company.
I am not an attorney. Any information I post is strictly my opinion and should be treated as such.

fisthardcheese

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  • They forced arbitration into your contract. Use it
Re: Bankruptcy and dealing with ex-husband
« Reply #5 on: April 21, 2017 02:59:21 PM »
He has breached your divorce settlement by not performing the actions necessary to remove your name from this property obligation.  Who cares if he couldn't get a refinance. He could have sold it or done whatever else was needed to abide by the settlement. 

Since he did not, then 3 years later you have the absolute right to take action to enforce that settlement agreement.  If BK will do that, then that is your right. 

He said he would have to take action if my bankruptcy affects him in any way. 

What action is he going to take?  Is he going to go back to the family court where he would have to answer to the judge why he didn't do what he was supposed to by the settlement agreement which forced you to take BK action?  I don't think he would like what the judge would say to him if he did that.
11 Arb Settlements (9 AAA, 2 JAMS)
3 JDB Suits Dismissed With Prejudice (2 pro-se, 1 consumer atty)
3 TCPA Settlements (2 pro-se, 1 consumer atty)
2 FCRA Settlements (consumer atty)
1 FDCPA Settlement (w consumer atty)
1 Small Claims Win (pro-se; Landlord/state consumer law violations)
1 State UDAP Settlement (ITS)
1 Federal PTC Settlement (before hearing; pro-se)

Bruno the JDB Killer

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Re: Bankruptcy and dealing with ex-husband
« Reply #6 on: April 21, 2017 03:38:37 PM »
He really had no way to promise that her name would be removed from the note any more than her lawyer did. We don't know the exact wording of the decree, either. If selling the property isn't listed, then it can't be enforced. If he was denied a re-fi, he fulfilled his obligation by making a good faith effort.


The part that needs to be fixed is the fact that she filed BK and has her name on the note.
I am not an attorney. Any information I post is strictly my opinion and should be treated as such.

CleaningUp

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Re: Bankruptcy and dealing with ex-husband
« Reply #7 on: April 21, 2017 06:13:33 PM »
The only recourse that she really has is to file against the ex for specific compliance with the mortgage contract.

Ex-Wife is going to have real damages that she can claim in addition to the breach of contract.  I doubt seriously that the bankruptcy court is going to insert itself into what is a contractual matter that already benefits the BK filer.

Bruno the JDB Killer

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Re: Bankruptcy and dealing with ex-husband
« Reply #8 on: April 21, 2017 07:06:53 PM »
But the mortgage contract does not address divorce or anything other than perhaps the demise of the signor. Once you sign the note, the bank owns you and is not likely to let loose. Two birds are better than one.

Her breach of contract involves the divorce decree. The note holder is not a party to that agreement; it means nothing. She still has to win that on the merits; the man obviously promised something (authorized by another genius lawyer no doubt) that he had no legal right to promise.

If a lawyer signed off on this idiotic promise, my first step would be to see if his liability insurance is paid up. Guess what step 2 would be.
I am not an attorney. Any information I post is strictly my opinion and should be treated as such.

The Litigator

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Re: Bankruptcy and dealing with ex-husband
« Reply #9 on: April 21, 2017 08:11:29 PM »
If the property is co-owned by the both of you and one files BK, it will almost certainly appear on both your reports.

IMHO op has a family court issue.

I'm not sure what op is so afraid of? If he was supposed to refinance the property and didn't, it would appear to me he breached the MSA, not you.

Let him drag you to court over a credit report ding. I'm sure a family court judge will take a dim view of the Court's time being wasted over silliness.

Bruno the JDB Killer

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Re: Bankruptcy and dealing with ex-husband
« Reply #10 on: April 22, 2017 02:14:15 PM »
If they ever sued, which is doubtful, I would name his lawyer as a third party defendant since he authorized a written promise which has no certainty of being able to be kept.
I am not an attorney. Any information I post is strictly my opinion and should be treated as such.

Clydesmom66

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Re: Bankruptcy and dealing with ex-husband
« Reply #11 on: April 22, 2017 03:35:21 PM »
She still has to win that on the merits; the man obviously promised something (authorized by another genius lawyer no doubt) that he had no legal right to promise.

If a lawyer signed off on this idiotic promise, my first step would be to see if his liability insurance is paid up. Guess what step 2 would be.

You would be wrong.  These kind of divorce decrees happen EVERY day in EVERY state and not only is it completely legal but the attorney isn't even liable for it happening.  The attorney merely drafts the order the couple agrees to or the Judge orders it.  While it is an incredibly BAD idea to agree to this stuff many spouses/couples do just that wanting out of the marriage not realizing the full potential consequences. The court can even order in the decree the spouse refinance within a certain time but none of that takes into account what happens if the spouse doesn't comply or in the case of refinancing CAN'T qualify to get it done.  This also happens when the family home is ordered to be sold and the housing market tanked:  many spouses tried to comply but there were no buyers and ended up in default. 

All the injured spouse can do is haul the offending ex back into family court for not complying but by then the damage is done.  The Family Courts have little to no teeth to enforce sanctions or punishment on the spouse that refuses to comply with the order to refinance.  If they don't qualify what is the court to do?  Order the lender to do it anyway?  They don't have that power.  In that case how is the lawyer responsible when the client lacks the credit to comply?  He/She isn't.  If you sued one of your many divorce attorneys for inking an order like that (which you signed and agreed to as part of the divorce) you would lose and end up paying his fees for filing a frivolous case.
Be VERY careful following advice from the internet! What worked for someone with thousands of posts on a message board may not work for YOU in your state.  Consult a lawyer when ever possible.

Bruno the JDB Killer

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Re: Bankruptcy and dealing with ex-husband
« Reply #12 on: April 22, 2017 04:09:05 PM »
In that case how is the lawyer responsible when the client lacks the credit to comply?

He didn't do his due diligence and drafted an agreement that contained conditions he knew or should have known could not be fulfilled, putting his client in an untenable position. That's legal malpractice in my book. Under the RCP, lawyers have an obligation under Rule 3.3, candor towards the tribunal.

A lawyer can be held to violate those rules in many ways.....even where case law is concerned.

“In fact, long-standing ethical rules require that you disclose the existence of the case if your opponent does not. Rule 3.3(a)(2) of the American Bar Association (ABA) Model Rules of Professional Conduct states that a lawyer shall not knowingly “fail to disclose to the tribunal legal authority in the controlling jurisdiction known to the lawyer to be directly adverse to the position of the client and not disclosed by opposing counsel.”

"An example is Jewelpak Corp. v. United States, 297 F.3d 1326, 1333 & n.6 (Fed. Cir. 2002), in which counsel failed to discuss a prior opinion by the same court of appeals that had held that publication in the Federal Register was not required to extinguish a prior established and uniform practice. The court noted “dismay” over counsel’s failure to cite the earlier case, stating that “officers of our court have an unfailing duty to bring to our attention the most relevant precedent that bears on the case at hand—both good and bad—of which they are aware.” Failure to cite controlling precedent was noted by the same court two years earlier in Amoco Oil Co. v. United States, 234 F.3d 1374, 1378 (Fed. Cir. 2000) as quoted here:

“This appeal is deficient in another respect. In its opening brief, appellant's counsel failed to cite, much less distinguish, clearly governing case law (viz., Carnival and Princess), with which counsel was intimately acquainted. Counsel for Amoco had in fact submitted an amicus brief in both the Carnival and Princess cases. In addition, the opinion in Carnival was issued forty days before the appellant's opening brief in this case was filed. By failing to cite controlling adverse authority, the conduct of appellant's counsel was inappropriate and potentially a violation of counsel's duty of candor toward the court. See Model Rules of Prof'l Conduct R. 3.3(a)(3) ("A lawyer shall not knowingly ... fail to disclose to the tribunal legal authority in the controlling jurisdiction known to the lawyer to be directly adverse to the position of the client and not disclosed by opposing counsel."). The appeal should wisely have been abandoned after this court's Carnival decision was handed down. At the very least, recognizing that an en banc rehearing or Supreme Court review was theoretically possible, although not likely, appellant's counsel could have either submitted a motion to stay the appeal, or included in its opening brief a frank citation of the Carnival decision along with plausible grounds for distinguishing the case. But ignoring such precedent and raising new issues in a reply brief are not acceptable.”

I am not an attorney. Any information I post is strictly my opinion and should be treated as such.

Clydesmom66

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Re: Bankruptcy and dealing with ex-husband
« Reply #13 on: April 22, 2017 10:11:37 PM »
"He didn't do his due diligence and drafted an agreement that contained conditions he knew or should have known could not be fulfilled, putting his client in an untenable position."

NO state requires the representing attorney do "due diligence" and determine what could not be fulfilled in a divorce decree.  Especially when it has future dates of compliance.  NO attorney has a crystal ball to predict what a client's financial situation will be in the future or if the housing market would collapse making sale/refinance impossible.  NO court is going to hold an attorney responsible for not being able to predict future actions.  It isn't malpractice because he can't tell the future.  If the client says he agrees to the terms and will comply the attorney has no way 100% to determine he won't and isn't responsible for ensuring compliance in civil matters. 

Your case law isn't even a direct comparison.  Unless you can point to actual sanctions, disciplinary action, or a malpractice verdict based on a lawyer engaging in this practice in family law divorce proceedings it is nothing more than your vivid imagination that sees a lawsuit in every action that doesn't get you what you want when you want it.
Be VERY careful following advice from the internet! What worked for someone with thousands of posts on a message board may not work for YOU in your state.  Consult a lawyer when ever possible.

CleaningUp

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Re: Bankruptcy and dealing with ex-husband
« Reply #14 on: April 22, 2017 11:46:16 PM »
Good luck getting a lawyer to take a "due diligence" action against another lawyer.  That sort of thing doesn't happen except in cases of flagrant malpractice or malfeasance...

And, none of that is present here.

Also, if you DO find a starving shingle-holder who IS willing to take the case, he is likely going to ask for a sizable retainer up front and request replenishment whenever the amount in the retainer runs low.   This is an invitation for the attorney to raid your personal finances.

As for the civil courts giving a petitioner relief on a specific compliance action, he has a wide range of discretion from ordering the "ex" to refinance immediately, or, if he cannot, to execute a second mortgage to the OP with specific mortgage payments to make her whole.