Legal advice needed - divorce/bankruptcy

[Mrsme]

Hi, regular DISer here with a different name for the sake of anonymity. I am looking for some legal advice from some knowledgable fellow DISers.

Story: My DH was previously married to another woman. In the divorce, ex-wife was granted the house and DH signed a quit claim deed. The divorce decree states that ex-wife was to attempt to refinance the mortgage (to remove DH's name from mortgage) within 45 days, and if unable to refinance she will assume all responsibility, financially and otherwise of house, holding husband harmless. Fast forward a couple years... Despite DH's numerous demands of her to refinance, as agreed, and have his name removed from her home's mortgage, she never does. She ends up getting behind in her payments and apparently was eventually foreclosed on. We find out about the foreclosure when DH is served with lawsuit papers stating he is being sued by said mortgage company for $100K. We do not have any money. Because litigation would be too costly and risky, DH was advised to file chapter 13 bankruptcy, which he did, and was granted. Only DH filed bankruptcy, not me. Ex-wife's $100k mortgage debt was the ONLY debt for which he filed/claimed bankrutcy against and was the ONLY debt for which relief was granted. It was the only debt he had. (Our mortgage, vehicles, etc is all in my name and I did not file).

If you are still with me, here is my question: Can DH file a small claims suit against ex-wife for the costs of filing bankruptcy? It costs a lot of money to file bankruptcy. He had no other debt. Ex-wife's mortgage was the only reason he had to file, for which she was supposed to "hold him harmless." Ex-wife not holding up her end of the bargain has caused a lot of problems for DH because he not cannot get credit for anything and won't be able to for years to come. Filing bankruptcy was also extremely time consuming and costly. I feel like the least ex-wife could do is cover the attorney fees and costs to file bankruptcy, but I do not know if that is something that one can file small claims for? We are in Michigan, if it matters. Advice is much appreciated.

 

[mrsksomeday]

She didn't pay the mortgage and let the home go into foreclosure, what makes you think she would pay a small claims settlement?

Cut your losses and let it go.

 

[pyrxtc]

Hi, regular DISer here with a different name for the sake of anonymity. I am looking for some legal advice from some knowledgable fellow DISers.

Story: My DH was previously married to another woman. In the divorce, ex-wife was granted the house and DH signed a quit claim deed. The divorce decree states that ex-wife was to attempt to refinance the mortgage (to remove DH's name from mortgage) within 45 days, and if unable to refinance she will assume all responsibility, financially and otherwise of house, holding husband harmless. Fast forward a couple years... Despite DH's numerous demands of her to refinance, as agreed, and have his name removed from her home's mortgage, she never does. She ends up getting behind in her payments and apparently was eventually foreclosed on. We find out about the foreclosure when DH is served with lawsuit papers stating he is being sued by said mortgage company for $100K. We do not have any money. Because litigation would be too costly and risky, DH was advised to file chapter 13 bankruptcy, which he did, and was granted. Only DH filed bankruptcy, not me. Ex-wife's $100k mortgage debt was the ONLY debt for which he filed/claimed bankrutcy against and was the ONLY debt for which relief was granted. It was the only debt he had. (Our mortgage, vehicles, etc is all in my name and I did not file).

If you are still with me, here is my question: Can DH file a small claims suit against ex-wife for the costs of filing bankruptcy? It costs a lot of money to file bankruptcy. He had no other debt. Ex-wife's mortgage was the only reason he had to file, for which she was supposed to "hold him harmless." Ex-wife not holding up her end of the bargain has caused a lot of problems for DH because he not cannot get credit for anything and won't be able to for years to come. Filing bankruptcy was also extremely time consuming and costly. I feel like the least ex-wife could do is cover the attorney fees and costs to file bankruptcy, but I do not know if that is something that one can file small claims for? We are in Michigan, if it matters. Advice is much appreciated.

He should have taken her back to court as soon as the 45 days were up and forced the name removal on her or gotten the house with her name off of it. i don't think she is going to pay the court order if you were to win anyways.

 

[Mrsme]

He should have taken her back to court as soon as the 45 days were up and forced the name removal on her or gotten the house with her name off of it. i don't think she is going to pay the court order if you were to win anyways.

He did go speak with an attorney at that point who told him there was not much that could be done because a judge cannot order the mortgage company to release him from the mortgage, despite the fact that he had no rights to the home anymore and despite the fact that ex-wife was solely responsible for paying the mortgage, per the divorce decree.

 

[anniemck]

He did go speak with an attorney at that point who told him there was not much that could be done because a judge cannot order the mortgage company to release him from the mortgage, despite the fact that he had no rights to the home anymore and despite the fact that ex-wife was solely responsible for paying the mortgage, per the divorce decree.

And this is exactly correct. This is exactly what I was told when it came down to the vehicle my ex was supposed to be paying on and did not after I our divorce.

 

[cornflake]

She didn't pay the mortgage and let the home go into foreclosure, what makes you think she would pay a small claims settlement?

Cut your losses and let it go.

This. Even if you did and won, what difference would it make? You think she'd pay you?

 

[Mrsme]

This. Even if you did and won, what difference would it make? You think she'd pay you?

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?

 

[RachaelA]

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?

It probably is, but a real lawyer will be able to tell you if you have any chance of winning. If you know her social, where she works or has a bank account, if you do sue her, win and get a judgment, you could file garnishments against her accounts and wages. You can also file a lien on her house.

But chances are its just going to be dragged out and be a lot of time and money upfront (to file all the different paperwork). I personally don't think its even worth the hassle unless it cost you tens of thousands of dollars to file BK.

 

[Princess on the Run]

He should have taken her back to court as soon as the 45 days were up and forced the name removal on her or gotten the house with her name off of it. i don't think she is going to pay the court order if you were to win anyways.

He did go speak with an attorney at that point who told him there was not much that could be done because a judge cannot order the mortgage company to release him from the mortgage, despite the fact that he had no rights to the home anymore and despite the fact that ex-wife was solely responsible for paying the mortgage, per the divorce decree.

And this is exactly correct. This is exactly what I was told when it came down to the vehicle my ex was supposed to be paying on and did not after I our divorce.

Filing BK was the wrong move. He should have filed a motion in the divorce court to enforce her obligation under the settlement agreement. It doesn't matter if the court can force the mortgage company to release him, the court CAN force her to sell the house if she doesn't refinance and that gets it out of his name.

The 2nd option is when he was served with foreclosure papers, he should have provided the mortgage company with a copy of the judgement stating that she is obligated to hold him harmless and then consolidate the cases together in which case he divorce court would stay the foreclosure proceeding because they had jurisdiction over the issue prior to the foreclosure action being filed.

Filing BK just complicated things and was unnecessary especially given this was the only debt included. A seriously doubt a small claims court would order her to pay those costs given your DH had other/better options. And as PPs have said, even if you got a judgment, she's not going to pay it anyway.

It's unfortunate that he got bad advice and filed BK because the easiest thing would have been filing a motion within the divorce court. At this point, I would still suggest filing a motion in divorce court asking the judge to enforce the provision where she holds him harmless. You may be able to get some relief that way (even though you're going to have trouble collecting).

 

[luv2sleep]

No way she's going to pay you guys anything. Most likely in her eyes she was wronged by him and is angry. I don't see the point of going to court.

What I don't understand is why he really thought he was liable for the $100K in the foreclosure. A lot if that is talk and they never really do anything or come after you. What could they have gotten? The house was gone. There was no available collateral attached. Many companies lose money in these foreclosures and they just grasp at straws trying to recoup something. I think the lawyer gave you guys bad advice and just wanted your money. That's unfortunate.

 

[Planogirl]

I would seek the advice of an attorney. I'm not sure if anyone here is one and even if the people here know of what they speak of, laws vary.

 

[momof1princess]

Filing BK was the wrong move. He should have filed a motion in the divorce court to enforce her obligation under the settlement agreement. It doesn't matter if the court can force the mortgage company to release him, the court CAN force her to sell the house if she doesn't refinance and that gets it out of his name.

The 2nd option is when he was served with foreclosure papers, he should have provided the mortgage company with a copy of the judgement stating that she is obligated to hold him harmless and then consolidate the cases together in which case he divorce court would stay the foreclosure proceeding because they had jurisdiction over the issue prior to the foreclosure action being filed.

Filing BK just complicated things and was unnecessary especially given this was the only debt included. A seriously doubt a small claims court would order her to pay those costs given your DH had other/better options. And as PPs have said, even if you got a judgment, she's not going to pay it anyway.

It's unfortunate that he got bad advice and filed BK because the easiest thing would have been filing a motion within the divorce court. At this point, I would still suggest filing a motion in divorce court asking the judge to enforce the provision where she holds him harmless. You may be able to get some relief that way (even though you're going to have trouble collecting).

yep, i totally agree. *former legal secretary* as soon as the 45 days were up, he should've had his divorce attorney file a "petition for contempt". and what i mean by that is, a petition for contempt is a document that lets the court know that she did not follow the judge's order to refinance the house and remove ex-DH's name, as stated in the divorce decree. there would be a hearing, and, more than likely, she would be found in contempt of court, and ordered to pay a fine and/or jailed for a short time. at least, this is how it works where i live. if nothing else, it would've probably served as a catalyst for her to get off her behind and refinance.

 

[luv2sleep]

I was supposed to get my ex husband's babe off of our house. The wording stated that I had a year to do it IF I could. Well I couldn't because the house was upside down. His name is still on the mortgage but not the house. Thankfully the wording in the decree protected me. Also since she foreclosed she probably couldn't have afforded a refinance either. Seems like the divorce attorneys should have helped them both understand this all. The other thing I know is that if the house had been foreclosed the bank would have had trouble going after him. Had something to do with my living in the house solely at the time, etc. I checked all of this out while going through the divorce. It was very clear. I got to keep my house too. Again, I don't know why he ended up in BK. that's unfortunate.

 

[Mrsme]

Filing BK was the wrong move. He should have filed a motion in the divorce court to enforce her obligation under the settlement agreement. It doesn't matter if the court can force the mortgage company to release him, the court CAN force her to sell the house if she doesn't refinance and that gets it out of his name.

The 2nd option is when he was served with foreclosure papers, he should have provided the mortgage company with a copy of the judgement stating that she is obligated to hold him harmless and then consolidate the cases together in which case he divorce court would stay the foreclosure proceeding because they had jurisdiction over the issue prior to the foreclosure action being filed.

Filing BK just complicated things and was unnecessary especially given this was the only debt included. A seriously doubt a small claims court would order her to pay those costs given your DH had other/better options. And as PPs have said, even if you got a judgment, she's not going to pay it anyway.

It's unfortunate that he got bad advice and filed BK because the easiest thing would have been filing a motion within the divorce court. At this point, I would still suggest filing a motion in divorce court asking the judge to enforce the provision where she holds him harmless. You may be able to get some relief that way (even though you're going to have trouble collecting).

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.

 

[Mrsme]

No way she's going to pay you guys anything. Most likely in her eyes she was wronged by him and is angry. I don't see the point of going to court.

What I don't understand is why he really thought he was liable for the $100K in the foreclosure. A lot if that is talk and they never really do anything or come after you. What could they have gotten? The house was gone. There was no available collateral attached. Many companies lose money in these foreclosures and they just grasp at straws trying to recoup something. I think the lawyer gave you guys bad advice and just wanted your money. That's unfortunate.

Believe me, he did not wrong her.

His name was on the mortgage. The mortgage company was suing him for $100k. It was not talk. He was served. They were actually coming after him. What could they have gotten? If he lost the case they would garnish his wages, his tax returns, etc until they recouped the money. $100k. For a home that he had not lived in for years and had no rights to for years, and then was foreclosed on. That was really hapening. The attorney suggested he not risk losing that case and also not spend $10k+ in litigation fees to risk possibly losing the case, and instead to file bankruptcy to protect himself.

 

[mistysue]

Check with your county (in Michigan these amounts vary by county) and see what the limits for filing in small claims court are. Then it's something like $50 in a lot of counties and a form. He may waste an afternoon of his time, but I would try it and see what happens. Whether or not it works probably depends on your judge.

 

[Princess on the Run]

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.

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!

 

[kathie859]

Filing BK was the wrong move. He should have filed a motion in the divorce court to enforce her obligation under the settlement agreement. It doesn't matter if the court can force the mortgage company to release him, the court CAN force her to sell the house if she doesn't refinance and that gets it out of his name.

The 2nd option is when he was served with foreclosure papers, he should have provided the mortgage company with a copy of the judgement stating that she is obligated to hold him harmless and then consolidate the cases together in which case he divorce court would stay the foreclosure proceeding because they had jurisdiction over the issue prior to the foreclosure action being filed.

Filing BK just complicated things and was unnecessary especially given this was the only debt included. A seriously doubt a small claims court would order her to pay those costs given your DH had other/better options. And as PPs have said, even if you got a judgment, she's not going to pay it anyway.

It's unfortunate that he got bad advice and filed BK because the easiest thing would have been filing a motion within the divorce court. At this point, I would still suggest filing a motion in divorce court asking the judge to enforce the provision where she holds him harmless. You may be able to get some relief that way (even though you're going to have trouble collecting).

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.

 

[Mom of DisKids]

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.....

 

[Princess on the Run]

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.

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