How does bankruptcy affect a property settlement?
Full text of question: When my husband and I divorced, he agreed to pay the mortgage note on our house. He filed bankruptcy a few months ago and the bank is now insisting that I make the payments or they will foreclose. How can they do this? What was the point in settling with my husband if he can now get out of his obligation? Answer: You obligated yourself to the bank when you first bought your house and signed the mortgage. Any agreement you later make with your husband does not change your obligation to the bank. His obligation under the settlement agreement is a personal commitment to you and it can be extinguished in a bankruptcy. People frequently enter into community property settlements with the belief the problems are over only to find that they are not if a former spouse goes bankrupt. This will often force the other spouse to declare bankruptcy as well.
