Bankruptcy & Divorce: Who Gets the Assets? - Westgate Law

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Bankruptcy & Divorce: Who Gets the Assets?

In a divorce, it can be difficult for both parties to agree on which assets belong to who. A situation wherein one individual receives the home and another receives other assets or, in some cases, nothing, can be complicated even further if the person that receives the home does not refinance it.

Divorce: What Does it Have to Do With Bankruptcy?

At this point, I’m sure this all seems very confusing, so I’ll drop in a little background. When divorce is filed, a Property Settlement Agreement is created in which the couple’s joint assets are divided between them. A part of this agreement states that the person who gets the house must remove the other’s name from the title and mortgage loan and refinance the property. The complications arise when that person doesn’t, and most of the time, the reason they don’t is because they can’t.

So, what do you do? Is there a solution to this common situation? What’s the first step?

If you’re in this situation, there’s really no easy way out. However, there are several courses of action you could take. First and foremost, however, it’s best to point out what not to do. Listen closely – no viable solutions will include kidnapping or forgery. Both are illegal and therefore…not something any lawyer (and non-legal advisor) would ever advise you to do. There are major liability concerns, it wouldn’t work, and most importantly it would be wrong.

What I can recommend is that you request that the family court find your ex-spouse in contempt of the order to refinance. In all honesty, this probably won’t be successful unless you could prove to the court that your ex spouse could easily refinance the loan. Another option is to do the work for them and shop around for lenders. If you can’t find a cooperating lender, however, you can’t expect to force the other person to do something that is, in effect, impossible.

If you find yourself in this type of impossible situation, your answer may come in the form of a bankruptcy. In order to determine if filing for bankruptcy is the right answer for you, get in touch with one of the experienced southern California bankruptcy attorneys at Westgate Law.

About the Author

Justin Harelik

Justin has a singular goal: to get people out of financial distress and move them to financial stability and prosperity. He does this by combining 15 years of in-depth experience in bankruptcy, credit management, debt negotiation and student loan modifications, and he does it with both English and Spanish-speaking clients.

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