my mother and i share a mortage she is considering filing BK how will this affect the mortage overall . advice needed .
"U Mother" ...now that's normally a subject line on many of the emails that I get. Well...the BK...well the BK is not good for obvious reasons. I know that a clean chapter 7 allows you to re astablish quickly but keeps you out of the prime stuff for a few years. The chapter 13..while looks bad for most conforming loans..is actually really good when you are 12 months into payment history and want to do an FHA loan. I am not sure what exactly to say about it.....BK will deffinetly NOT raise your scores or make anyone run after you for a loan but in a lot of cases it IS the best scenario IF done the Right way.
Alot of "what will happen" depends on the laws of your particular state, what Chapter your mother files, and the status of the loan at the time of filing.
Scroll to the bottom of the following website to see how much home equity is exempt in your state in a chapter 7. http://www.bankruptcyinformation.com/ If it's all exempt, the mortgage shouldn't be affected at all. As long as the payments aren't behind, it can be paid outside of bk. If the equity isn't exempt, that could complicate things. I don't know if she would only have to claim half the equity since half is yours or what. That would be a question for an attorney.
