Re: What happens when someone files BK on a mortgage I consigned on?
08-25-2012 06:26 AM
Right now you and the co-borrower are both equally liable for the mortgage payment. The bank can come after you for payment or after the co-borrower or both. If, or when, the co-borrower files BK then if they are successfully discharged from their BK the co-borrower will no longer be responsible for the mortgage payment (if he/she has not reaffirmed the debt in the BK).
You however will still be responsible for all the payments.
The fact that you deeded away the asset has no effect on your liability for the repayment of the mortgage.
Get your friend to sell the house if they can't afford it. Then have them file BK. Because once the BK is over, the bank will move to foreclose if the payments aren't made on the mortgage. That f/c will land on your report too. Anything having to do with the loan will be on your credit report because you signed up for the mortgage.