Does a wife’s bankruptcy discharge on the familyhouse release her husband from that financial obligation?
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Does a wife’s bankruptcy discharge on the familyhouse release her husband from that financial obligation?
We have been trying for a loan modification. Bank of America has offered us the HAFA short sale in lieu of foreclosure. We are currently residing in NM while our son and brother live in the house in FL. My wife filed for bankruptcy and the house was discharged 18 months ago. Does this in anyway discharge the husband from that financial obligation. If not should we accept the short sale option?
Asked on June 29, 2011 under Real Estate Law, Florida
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
You need to call the attorney in Florida as to what happened here with the house. It is my understanding that the Constitution of the State of Florida permits a filer to claim his homestead exempt from the claims of creditors. Provided the property does not exceed the applicable restrictions on acreage, the exemption allowed is of an unlimited value. There are limitations and exceptions to homestead exemptions for those who have recently moved to or purchased a home in Florida. But filing Chapter 7 does not necessarily protect you from foreclosure. And in may states the lien holder will loo to the non-filing party for repayment. Selling the house is always better than foreclosure but really this question can only be answered after looking at all the paperwork involved. What ever you decide make sure that any deficiency against you is waived. Good luck.
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