Expert: Norma Duenas - California Bankruptcy Attorney - 2/20/2010

Question
QUESTION: Ex wife kept house.  She cant refinance and I want off the mortgage.  Can ch 7 or 13 release me of liability on that debt?  I might qualify for 7 but if not I would do 13 if that would clear me off that mortgage.  It was a purchase money mortgage only.

ANSWER: Filing for bankruptcy does release your personal liability with regard to the mortgage. If you were discharged from the debt in a bankruptcy, the creditor would have the right to seek payment from either your ex-wife, if the mortgage is also in her name, or to go after the secured home. This answer is assuming that during your divorce the debt from the home was not assigned to you.

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QUESTION: Correct.  Home was assigned to her and her name is also on the mortgage and she is paying it.  I want to be released of liability for it so I can buy another house.  Make too much to file ch 7.  Can ch 13 work to release me of liability or is it only for payment plans?

Answer
Chapter 13 is a repayment plan for your unsecured, and priority debts. Filing for Chapter 13 will remove your personal liability with regard to the mortgage. Chapter 13 generally involves a repayment to your creditors over a term of 36 months to 60 months. During this process, the mortgage amount would be listed as a secured debt (with an acknowledgment that your ex-spouse will be making the payments). Chapter 13 bankruptcy can remove your personal liability for the mortgage, assuming that you qualify for filing a Chapter 13 bankruptcy case.