Mom's BK on credit report!

Discussion in 'Credit Talk' started by cable666, May 16, 2001.

  1. cable666

    cable666 Well-Known Member

    A friend of mine explained an unusual situation that she is in. I'm not sure what advice to give, so I thought that I would bounce off you good people.

    My friend wants to sell her home and buy another in a better part of town. She went to a mortgage broker who pulled her credit report and discovered that she has a bankruptcy on her report. Because of that, he could not get her good mortgage terms.

    Needless to say, my friend was in shock. She has never missed any payments on anything, nor declared bankruptcy. So she did some investigation.

    Years ago she co-signed a mortgage for her mother. Her mother paid the mortgage every month and has never missed a payment or been late.

    A couple of years ago after a dry spell in her business the mother declared bankruptcy. She had stopped paying the credit cards and other debts and managed to keep the house payments going. She did not tell her family that she had done this.

    After the mother's bankruptcy, the mother managed to keep the house and the mortgage. Last month she sold the house and paid off the mortgage.

    My friend disputed the bankrutpcy record with the CRA. The CRA responded that because she was jointly liable for the mortgage as a co-signer, she gets dinged this way.

    I don't get it. She did not declare BK. The mortgage company was given every dollar on time at all times. Now it appears that my friend declared bankruptcy herself.

    My friend doesn't know if it was a chapter 7 or chapter 13. Her mother refuses to discuss it. When she tries, the mother starts crying and telling her that she doesn't understand how difficult things were then and how much pressure she was placed under by creditors. Since she kept the house and all her equity, I suspect that it was a 13.

    The mom did not use an attorney. She used a self help BK package.

    Any thoughts?
  2. Momof3

    Momof3 Well-Known Member

    I suspect it is a Chap 13 as well. I think your friends Mom isn't telling the whole story here. BK are public records, if the mom refuses to explain she may want to check those court records and see what exactly happened.
  3. breeze

    breeze Well-Known Member

    It could have been ch 7 - there is a homestead probision that allows a person to keep their home and continue mortgage payments.

    May I suggest contacting Scott Davis who moderates the yahoo credit repair group, or post this question to that group also. He's a mortgage broker and would most likely know if there is anything she can do to get this off.

  4. breeze

    breeze Well-Known Member

    Checking the court record is a good idea.


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