New Visitor
frustratedinAL
Posts: 2
Registered: ‎08-10-2010
Mortgage and divorce decree

My husband's ex-wife got the house in their divorce.  It specifically states in the decree that he was to refnance the house up to 60 days after the divorce was finalized in order to remove his name from the loan.  It also stated that she was to do this every 6 months until his name was removed and that he would be held faultless.  And yes, it specifically states that he will be held faultless.  Of course, since she is such a lovely woman, that never happened.  As a matter of fact, the house went in to foreclosure and she ended up filing bankruptcy on it.  His credit is now in the toilet.  He is stuck with is on his report for the next 10 years?  Is there anything at all we can do?

Moderator
guiness56
Posts: 22,408
Registered: ‎01-17-2008
Re: Mortgage and divorce decree
[ Edited ]

Hi and welcome to the forums.

 

About the only thing the ex would be is in contempt of a court order.

 

Creditors really do not care about what is in a divorce decree and are not bound by them.  As long as they both signed for the house, they are equally liable for the debt.

 

Is her bankruptcy showing up on his CR?

 

New Visitor
frustratedinAL
Posts: 2
Registered: ‎08-10-2010
Re: Mortgage and divorce decree

Thankfully no, her bankruptcy is not on his CR.  Unfortunately, the foreclosure is.  I guess he should have made her sell it before they divorced.  However, he didn't want to make her move because of the children. 

Senior Contributor
O6
Posts: 3,626
Registered: ‎10-13-2009
Re: Mortgage and divorce decree

frustratedinAL wrote:

My husband's ex-wife got the house in their divorce.  It specifically states in the decree that he was to refnance the house up to 60 days after the divorce was finalized in order to remove his name from the loan.  It also stated that she was to do this every 6 months until his name was removed and that he would be held faultless.  And yes, it specifically states that he will be held faultless.  Of course, since she is such a lovely woman, that never happened.  As a matter of fact, the house went in to foreclosure and she ended up filing bankruptcy on it.  His credit is now in the toilet.  He is stuck with is on his report for the next 10 years?  Is there anything at all we can do?


I wish I could say the Guiness56 was incorrect, but, alas, I cannot.  Creditor's a virtually never bound by any after-the-fact settlement agreement or divorce decree.  Unfortunately the foreclosure will likely remain on his credit report for the full seven years.  In addition, if your state allows deficiency judgments, he may well be liable in that aspect, too.

 

I see few remedies to the foreclosure reporting and affecting his credit profile.  Contempt of court may be an option, but courts are generally reluctant to hold a party in contempt over financial terms of a divorce that do not involve child support or, sometimes, alimony.  Besides, the damage is done and even in the extremely unlikely event the court would issue a contempt order it will not make your husband whole.

 

I would suggest three options.  Again, they will not erase the negative items on his credit report, but they may lessen additional negatives, lower the financial burden and possibly prevent a lawsuit for deciciency.

 

1.  *Consult a local attorney; and / or

2.  Deal with the creditor to find a possible solution that involves avoiding being sued;

3.  **Sue the ex-wife for money damages.

 

* The sooner the better.

 

** This may seem unnecesssary at this point because she is likely a total financial wreck, but obtaining a judgment is an extremely wise move.  First of all, she cannot have the judgment discharged in bankruptcy for another ten years or so.  Second, although an economic basket case now, within the next decade or so she may -- indeed is likely to -- have $$ -- either on her own of through trough transferrance via some sucker, er ... I mean fellow ... crazy enough to marry her.

 

IAALBNYL
Established Member
Weimmutti
Posts: 18
Registered: ‎08-11-2012
Re: Mortgage and divorce decree
Just divorced myself. I have the house and refinanced it but got 50,000 in debt. I would do this again and again. This was part of our settlement. During divorce remember to contact your lender, you might be able to do a mortgage loan modification for 600.00 but the person excepting the house must qualify like in a refinance. Never sign a quick deed during divorce if your name is on a loan a divorce settlement is not a binding contract except with your ex spouse.