SEPARATION AND BANKRUPTCY
I HAVE BEEN SEPARATED FROM MY WIFE FOR 4 YEARS, BUT DO NOT HAVE A LEGAL SEPARATION, I GAVE HER ALL THE PROFIT FROM THE SALE OF OUR MATRIMONIAL HOME, BUT AM NOW PAYING A LOAN AND A CREDIT CARD BILL WHICH SHE SAYS SHE CANNOT AFFORD TO PAY, I AM NOT ABLE TO SUPPORT MYSELF WITH THESE PAYMENTS AND WAS CONSIDERING FILING FOR BANKRUPTCY, WILL MY EX-WIFE HAVE TO BE INVOLVED IF HER NAME IS ON THE LOAN? I HAVE NO ASSETS.
A mortgage on a house is a secured creditor, and therefore is not generally discharged in a bankruptcy. If both of your names are on the mortgage, you are both responsible for the payments; if the payments are not made, the bank will take the house.
I suggest you discuss this with your lawyer; if he is still living in the house, your lawyer should probably contact the bank to have your name removed from the mortgage.
No, your creditors can only access the 50% of the non-exempt equity that relates to you and this won’t be done directly by the creditors it will mostly be handled by the trustee who is administering the bankruptcy.
To get a better idea of how this issue relating to the property and the separation agreement is going to work you are best off to contact a local trustee, have them look at the details surrounding this issue and then explain what steps would have to be taken. The trustee will be able to give you a good idea as to what you can expect to happen and the time lines associated.
If you ex-wife’s name is on the loan and you file bankruptcy then it is ver likely that the bank will try and collect the loan payments from her. As long as her name is on the debt there is no way to avoid this, except to payoff the loan.