Passaic, NJ asked in Bankruptcy for New Jersey

Q: Will my credit be destroyed for 7 years if my brother Sells the house that I co-signed for him through bankruptcy?

So my older brother has filed bankruptcy on a house that I co-signed for, he is planning on selling the house Once the bankruptcy go through.

I would like to know if I need to hire an attorney and If I am entitled 1/2 of the sale of the house Once it is sold. And will my credit be messed up for seven years because of the bankruptcy

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3 Lawyer Answers
Michael David Siegel
Michael David Siegel
Answered
  • Bankruptcy Lawyer
  • New York, NY
  • Licensed in New Jersey

A: You get proceeds if you are on the deed. If you are just on the loan, you are not on title and get no proceeds. However, the defaulted loan will very much impact your credit. It already has.

1 user found this answer helpful

W. J. Winterstein Jr.
PREMIUM
W. J. Winterstein Jr.
Answered
  • Bankruptcy Lawyer
  • Boyertown, PA

A: Your credit score is set by the three major credit bureaus, Experian, Equifax, and TransUnion. Each has its own matrix for determining scores, and each calculates differing scores on each individual, which are disseminated to creditors who have acquired a right to know. The credit bureaus historically have operated by their own overly harsh and dubious rules, until about ten years ago, when the Consumer Financial Protection Bureau was established, with oversight powers over the credit bureaus.

It's my understanding that a bankruptcy filing stays on the credit report of the one who files a bankruptcy for ten years.

A bankruptcy filing will tank the debtor's score, but it gradually recovers.

Your brother's bankruptcy should not show on your credit reports.

If you are shown as a co-debtor with your brother on any outstanding debts, the debts will probably be shown on your credit report. So long as those debts are paid current, your credit score should not suffer. If there is a default(s)/late payment on any such accounts, that will most probably adversely affect your credit scores. You can check your own credit score with each of the bureaus online.

You also have a right to question or file an objection to any item on your credit report, with any of the credit bureaus.

If you are an owner of record of any interest in the real property, yes, you should be paid for your share at the closing/settlement of any sale of the property, in exchange for your deed/release of claim to the property. It may be that the bankruptcy trustee will move to sell your brother's interest in the property. If so, you should be notified by the trustee/court. And if that happens, you should most assuredly confer with an attorney.

Stuart Nachbar
PREMIUM
Stuart Nachbar
Answered
  • Bankruptcy Lawyer
  • Livingston, NJ
  • Licensed in New Jersey

A: I believe that consulting with counsel is always beneficial. The question is are you on Deed/Title and/or Mortgage. That is the first and foremost questions. As for your credit, please check your report and see what has already been the effect.

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