Q: My home is in foreclosure and up for sheriff sale soon. My ex and I recently divorced with no property settlement and
He lives in the home. We are both listed on the deed to the home but I am on the mortgage alone. If he files chapter 13 bankruptcy and includes the home, would this stop the upcoming sale and foreclosure? If Ch. 13 temporarily stops the sale, what are the steps he should then take to keep the home?
A: Yes. Filing chapter 13 will temporarily stop the sale.
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When a Ch. 13 case is filed, there is both an immediate automatic stay prohibiting creditors to proceed against the debtor and/or his assets, and importantly, there is also an automatic "co-debtor stay" to prohibit creditor actions against other non-bankrupts who are jointly liable with the debtor on any debt, so long as the debtor's plan "deals with" the creditor's claim.
Surely, your ex's plan would deal with the mortgage claim, as it is upon his residence.
The co-debtor stay, like the automatic stay, lasts for the duration of the Ch. 13 case (unless sooner terminated by the bankruptcy court). Chapter 13 cases can last up to five years.
The holder of the mortgage would be prohibited from commencing or continuing any action to collect on its debt claim, and proof of the Ch. 13 filing should be presented to both the foreclosing mortgage holder and to the sheriff planning to conduct the foreclosure sale.
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A: This may not be possible but he needs to purchase your interest from you and/or "refinance" the mortgage from your name to him name. Refinance is probably not the correct term in this instance since he is not on the mortgage but I assume that the reason for the foreclosure is that you (or y'all) are behind on the mortgage so it needs to resolved.
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