Mortgages, ex-spouses, and My Bankruptcy
Many ex-spouses still share debt on mortgage/vehicle notes and credit card accounts. If only one party files for bankruptcy, can the creditor go after the party not filing for bankruptcy to collect a debt?
The answer is, probably not. In bankruptcy, a co-debtor stay may be available (at least during the bankruptcy). The stay would apply to the party filing for bankruptcy and to the non-filing party if requested. If the debtor is in a chapter 13, the co-debtor stay would last as long as the debtor continued making the plan payments to the Trustee and the case does not get dismissed.
Creditors can ask the court for relief from the automatic and co-debtor stays. If granted, the co-debtor may have to continue making the payments in order to keep his or her interest in the property.
However, please keep in mind, once the debtor receives his or her discharge in connection with the shared marital debt, the creditor can collect the full balance from the non-filing party at the conclusion of the bankruptcy.
If you have questions about bankruptcy and foreclosure in Florida contact a foreclosure defense and bankruptcy attorney.
Greg Gilbert
Keith Maynard
