What to do about this situation?

[wannabedebtfree]

I was divorced back in 1996. In the divorce papers, 25 acres went to my ex, but my name was never taken off the loan. I had called the bank before because I noticed it on my credit report. The bank said my ex would have to refinance and have my name removed. But he has always been up to date on payments, so I was never too concerned. Figure his new wife would eventually press the subject enough and he would change it.

So now my husband and I are on the verge of bankruptcy and I'm wondering how this property will fit into the picture. I really don't want them to know if we file bk. Does anyone know what to do?? I thought I could just call and see if he would refinance to have my name removed, and just not mention the bk. Is this going to cause a problem?

[HHM]

This can be a confusing situation and you probably need to see a lawyer to help sort it out.

When it comes to secured property and divorce, there are two issues, (1) the Title to the Property, (2) the Note (loan) that is secured by the property. In bankruptcy, the issue is the Title, not so much the note.

As I understand it, your ex-husband was awarded the 25 acres as his sole and seperate property back in 1996 based on the Decree of Divorce.
Question 1: Did you ever sign any sort of Quit Claim Deed to clear your name from the Title.
If yes, then your Bankruptcy should not be a problem.
If no, then to all the world, you still have some ownership interest in the land and it could cause problems in your Bankruptcy because its an asset for which its likely that no exemption applies.

As I understand it, your name is still on the loan. This circumstance is not that problematic. You list the creditor on your Bankruptcy. (the interesting question is that if you signed a quit claim deed, would you list them as secured or unsecured, I don't really know the answer). If you ex-spouse is current on the payments, the lender won't care that you filed Bk and your obligation on the loan should be extinguished in the BK.

Again, if you haven't signed a Quit Claim Deed, you will want to do that as soon as possible. If the Divorce is clear that your Ex gets the property and was supposed to in 1996, then I don't think the trustee will make too big a deal about you signing a quit claim deed to your Ex this close to you filing a BK, (however, you really really need to speak to a lawyer before you do this).