Legal advice needed - divorce/bankruptcy

[Mom of DisKids]

Correct, the creditor can and will come after a joint debtor. However, the divorce court had jurisdiction over the property and debt before the foreclosure action was filed and therefore CAN consolidate the 2 actions and force the bank to stay their claim (meaning not take any action). You now have a divorce judge making decisions about it as opposed to a foreclosure judge. This is helpful because a divorce judge has a better understanding of how ex-spouses sometimes don't do what they were supposed to do (and may even recall the specific parties if they were in his court room often enough) as opposed to a foreclosure judge who is going to get the bank paid however is easiest without really worrying about who was supposed to do what. It happens all the time and more now than before given how bad the real estate market has been.

*Standard disclaimer that all states vary but I don't know of any state that does not give the first court jurisdiction

Ohio......Ohio does not give the first court jurisdiction

 

[Mrsme]

I respectfully disagree that the divorce court has any "sway" enforcing the order to get the house put in the ex-wife's name. It's the same for shared debt of any kind. Often, the divorce decree will say Wife pays this and Husband pays that--BUT if it's joint debt and either don't do as directed, it's pretty much as the OP indicated. The debtor can and will come after the other party.

OP--I think your DH did the right thing. I'm sure it wasn't an easy decision.

Thank you. No, it was NOT an easy decision and it was not the decision we wanted to make. We WANTED to fight it, if for nothing else based on principle because it all just seems to wrong, but in the end we made the decision that we felt we HAD to make at that point.

 

[Mrsme]

OP....same thing happened to me (except I'm the ex-wife, and I gave ex-husbandthe house.) He didn't sell it or refinance in 6 months like ordered in divorce decree, I DID take him to court for contempt of court, he was AGAIN told he now had 30 days to do something. He didn't, got behind on payments, filed for bankruptcy.....Bank sued the both of us, then came after me because he had filed for bankruptcy. I spent $250 file a claim that it was all his doing and responsibility, but in the end, it doesn't matter! Divorce court cannot trump the bank. Now 2 years later, there was finally a sheriff's sale (I have no idea what happened), and in my state, now the bank has another 2 years to sue me for any lost money (what was owed-the sale price). Oh, and we got divorced in 2005!!!!! This damn house just hangs over my head It seems so unfair, but I guess that's the punishment for marrying a d-bag.....

It sure does seem unfair. How is one supposed to move on with their life when their name/credit is tied up in their ex's home? Let alone when they decide not to pay the bills anymore!

That is why everything is in my name, because even when ex-wife was paying her mortgage, DH could not get approved for another mortgage with me because his name was already on her mortgage and he does not make the kind of money that would facilitate being approved for another mortgage. Even though he was to be "held harmless," even though this was years later, and even though he was remarrried and now had children. He could not get us a home because his name was stuck on ex-wife's home. It just seems crazy to me, and so unfair.

Good luck to you! I hope it all works out better for you than it did for my DH.

 

[seashoreCM]

Even if the divorce court could stay (hold off) the foreclosure, that would be temporary. If the bank was unable to collect from the ex-spouse whom the divorce court said was liable for the debt the bank can eventually go after the other ex-spouse. Bankruptcy is one tool that can be used to induce the bank to take a discount (short sale, downward renegotiation, etc.).

 

[Lionqueen2]

Yeah, maybe not. You guys are probably right. But I guess I still just want to know if this is even a "sue-able" thing?

Suing is one thing; collecting is another.

It's fairly easy to bring a small claims suit to court, but it becomes meaningless if you are unable to recover the money from someone who does not handle her affairs responsibly.

 

[mrsksomeday]

I would want to move on with my life and make the ex a distant memory. Too much time, stress, and money has been wasted on her already.

You know you will not collect, why do it?

 

[Judique]

Ok, well thanks all for the advice.

The mortgage was upside down. That is why it was not sold. Unfortunately, the several attorneys that he met with/hired over the course of all this told him that there was really no other way out of this. I don't quite understand why they would have lied, because I don't think it served them any benefit. Yes, it is unfortunate, but here we are. Thanks for the info.

I'm just wondering why this ex would have wanted to get saddled with an upside down house in the divorce???

There must be a lot more to this story.

If I were the ex wife I would have been running as fast as I could away from that possibility.

What else did she get in settlement that made wanting the upside down house - a liability - a plus for her?

Or did she initially just get the shaft - then the mortgage company caught up with your hubby?

I've been through the divorce, the house refinance, etc, so this makes no sense to me. I had 10 years to refinance - I did it in 3 years. Mortgages are usually based on both incomes and sometimes it takes a bit of time for one party to be able to manage.

With the basics that you have presented, your husband had no other debts that he had to declare during bankruptcy - the wife must have had some pretty poor legal representation - or she went it alone.

 

[maggiew]

I'm just wondering why this ex would have wanted to get saddled with an upside down house in the divorce???

There must be a lot more to this story.

If I were the ex wife I would have been running as fast as I could away from that possibility.

What else did she get in settlement that made wanting the upside down house - a liability - a plus for her?

.

Maybe she wanted it for the kids???

Maggie

 

[Princess on the Run]

I'm just wondering why this ex would have wanted to get saddled with an upside down house in the divorce???

Maybe she wanted it for the kids???

In my experience it is extremely common for women to want to keep the house (for the kids, usually) becase they fear not being able to get another home to keep a roof over their children's heads. Sometimes, they don't truly understand the liability of an upside-down house. Many times, they hear "I'm getting the house" and don't fully understand that means also getting the debt associated with maintaining the house. Or they thought they could manage but it didn't work out that way. It's also possible it wasn't upside-down when they got divorced years ago and with the real estate market situation, has since become a liability.

I would not presume the OP's DH did anything scandalous just because his ex kept the house. She probably wanted it.

 

[luv2sleep]

In my experience it is extremely common for women to want to keep the house (for the kids, usually) becase they fear not being able to get another home to keep a roof over their children's heads. Sometimes, they don't truly understand the liability of an upside-down house. Many times, they hear "I'm getting the house" and don't fully understand that means also getting the debt associated with maintaining the house. Or they thought they could manage but it didn't work out that way. It's also possible it wasn't upside-down when they got divorced years ago and with the real estate market situation, has since become a liability.

I would not presume the OP's DH did anything scandalous just because his ex kept the house. She probably wanted it.

Yup. It's why I kept my house...my son, great neighborhood that's safe with good schools. I couldn't have afforded at the time to hop out and buy another. The difference with me is that I was the breadwinner and the only one employed so I was able to make it work. It's upside down but, I couldn't have afforded to buy anything else. I'd rather stay here and own than rent. Right now I'm still getting a great tax break. You don't get that with renting. My mortgage costs the same as a rental. Being in a home is emotional too. That could have been part of it. For me getting to keep the house was a huge deal.

 

[Mrsme]

She has no children. But she wanted the house. It was not upside down at the time of divorce. They had only bought it less than a year prior to finalization of divorce. DH had put quite a bit of his personal money down on the home because it was what she wanted. He moved out six months later when they mutually decided that the marriage was not working out. She did have legal representation, and at the time she was for sure getting the better end of the deal. But then the economy & housing market went to heck, especially here in metro Detroit, she apparently she could not keep up with her payments etc etc. By that time, it was upside down.

 

[Mrsme]

If the foreclosure action was consolidated into the divorce and then stayed, the mortgage company would have a vested interest in taking whatever they can get on the loan and would probably reduce the balance for a short sale.

Not knowing what was specifically asked or who, I hate to play Monday morning QB, but I practiced divorce law for about 8 years before changing areas and my DH still does (going on 16 years for him). I can't tell you how often someone either asked the wrong kind of attorney or there was a mis-communication somewhere. I don't know what type of attorney he spoke with but if it wasn't a divorce attorney who specifically practices divorce, there is a good chance they may not be up on all of these things. People (usually family!) ask me for legal advice and it may be something I know nothing about. I try to explain to them that you wouldn't ask your cardiologist to do a C-Section or your Orthopedic surgeon to perform heart surgery. Same goes with lawyers. We usually have an area or two that we know and the rest may be completely foreign. A good lawyer doesn't try to practice outside his area of expertise but there are plenty who will take cases they probably shouldn't rather than turn away a client.

All that said, it isn't too late to file something in the divorce case to try and recoop your BK attorney fees since she was obligated to hold him harmless. It's worth a try!

Thank you! You are right, its worth a shot... what do we have to lose at this point!?!

She did have the home up for short sale at the time of forelosure. I guess it didn't sell and for some reason they foreclosed on her. It is kind of odd I think because she really had not been in default all that long, according to DH's credit report. We really do not know what happened because he no longer has contact with her, and we did not find out about foreclosure until after the fact (when he was served with lawsuit papers). But we did know she had it up for short sale.

As for the lawyers, I thought we were going to appropriate lawyers. They all claimed to specialize in the relevent areas on their websites (divorce, real estate, bankruptcy, blah, blah). These were not friends or family. They were lawyers that we looked up on the internet and were paying for their services and/or trying to hire, had they said there was anything that could be done. DH was literally told (way before foreclosure and lawsuit, when we were trying to find any way to get his name off her mortgage) that basically all he could do was accept that there was nothing he could do.

It really sucks that it turned out like this, but anyhow, thank you for your help! I appreciate it.