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Credit Basics => General Credit Forum => Letters => Topic started by: newenglanders on October 03, 2014 05:09:12 AM

Title: Letter from DCA sent to an ex about mortgage default, several questions
Post by: newenglanders on October 03, 2014 05:09:12 AM
Evening all,

Here's my situation and a few questions upon which I hope you may shed some light.

Divorced over a decade ago. Lost marital home in divorce. Ordered to sign over deed, but of course ex could not amend or refinance property so my name remained on the mortgage. Divorce decree clearly made the property financials her responsibility. She fell behind on payments and let it go into foreclosure in 2008. She immediately filed for bankruptcy (and included the property in it).

Zoom ahead to last month. She called to tell me a DCA sent a letter in my name to her address. I had her open it and it was a collection letter demanding payment for the shortfall on the foreclosure sale of the property - over $60k.

Based on my circumstances I would think I am on the hook for that debt. As far as I am aware in NH mortgage related debt has a SOL of some 20 years, and thanks to the Court's inability to force a lender to remove a borrower's name my only recourse would be to sue my ex to recoup whatever losses I incur from the debt collection efforts (she has no money nor assets and that will not change in the decades ahead), or perhaps to file bankruptcy and include that debt in it.

What should I do about that letter? They didn't send it to my current legal address nor any previous legal address of mine and apparently have no clue about my current address despite the fact that I properly forwarded all mail to new residences since my divorce and subsequent move to two cities. Can they get a judgment without first properly locating and serving me? Seems ridiculous but I've heard that is entirely possible.

Or should I respond to them, and if so, with what sort of response letter? Ordinarily I would have sent them a SOL letter (because cc debt has a 3 year SOL in NH), but this is a whole different ballgame.

Any insight would be appreciated.

Thanks

NE

Title: Re: Letter from DCA sent to an ex about mortgage default, several questions
Post by: Bruno the JDB Killer on October 03, 2014 01:31:01 PM
As you have seen, the divorce decree has no bearing in court, the lender isn't a party to it. Ducking service won't work, they'll file at your last known address or by publication, and they'll get a judgment. That will just make more work.

I would see a real estate attorney on this, the one who handled the short sale would be a good place to start. Most short sales are "take what you can get" deals.
Title: Re: Letter from DCA sent to an ex about mortgage default, several questions
Post by: kevinmanheim on October 03, 2014 01:48:25 PM
Do you have any cash available to make a settlement offer? If so, I would consider doing so to avoid bankruptcy.

Just be sure to get it in writing before you send money. The payment will settle the debt in full, the balance will not be sold to another party.

Expect to receive a 1099 for the balance if you settle for less than full.

Before you agree to anything, make sure the party asking for the money is the one that owns the debt.
Title: Re: Letter from DCA sent to an ex about mortgage default, several questions
Post by: newenglanders on October 03, 2014 03:15:05 PM
I figured as much. Thank you both for your replies.

No, unfortunately I don't have the cash to settle any amount. In fact, I'm still paying back other debts related to that marriage. I earned substantially (about 10x) more than my ex at the time and the Court saddled me with the majority of the marital debts.  At this point I don't even have the funds (nor the third party resources to obtain the funds) to engage an attorney for bankruptcy or consultation about the letter.

It seems like there's little I can do at the moment to slow the process down while I try to find an effective way to deal with it.

Title: Re: Letter from DCA sent to an ex about mortgage default, several questions
Post by: Bruno the JDB Killer on October 03, 2014 03:24:43 PM
Service by publication takes place when they cannot locate you. They have to prove they tried to serve you but you were not at the last known address. This is done to avoid delaying or stopping cases by hiding.

Most BK attorneys give a free consultation. BK immediately strops any court cases or collection efforts. That alone may free up enough to pay the BK lawyer. If your income is below the median for your state, you automatically qualify for CH7. Sure beats a 60K judgment. All the marital debt should go away, too.

http://www.justice.gov/ust/eo/bapcpa/20140501/bci_data/median_income_table.htm
Title: Re: Letter from DCA sent to an ex about mortgage default, several questions
Post by: montag on October 03, 2014 03:36:22 PM
Before you agree to anything, make sure the party asking for the money is the one that owns the debt.
Definately check on that.  It may be a matter of doing a search on known robosigners.

This is where you definately need a lawyer.  BK may be the best way to move on.