If my spouse is co signor, will he have to pay the full amount of the mortgage immediately? My husband is co-signor on the mortgage, if I declare personal bankruptcy, I understand that the bank will go after him to pay the debt.
My question is: will he just have to assume the debt solely on his own and continue paying as laid out in the mortgage or will the bank demand the full payment of the amount owing when I declare bankrupt?
A co-signor is basically a co-owner – he/she is registered on the title and is equally responsible for payments.
I don’t have enough information to answer your question.
It is common in a bankruptcy, where a mortgaged home is involved, for the home to be retained, with the mortgage holders continuing the payments. If the home is seriously “underwater” then the home can be given up or turned back to the mortgage holder.
If this latter scenario is the case then your husband will be responsible for the mortgage payments. It is probably unrealistic for the mortgage holder to expect full payment for the mortgage so likely they will agree to have your husband keep making payments on the mortgage.
You and your husband together should set up a FREE consultation with a trustee in your area to learn your options.
You can find a trustee at the following link:
Earl Sands, Licensed Insolvency Trustee