Play The Innocent

Esther's ex-husband was awarded a home in their divorce. She gave him a quitclaim deed. He did not refinance it. There's a lien on the property, and the mortgage company wants to come after her.

QUESTION: Esther in Washington says her ex-husband was awarded a home in their divorce, and she gave him a quitclaim deed. He did not refinance it and now there’s a lien on the property, and the mortgage company wants to come after her. What can she do now?

ANSWER: Your ex-husband is not protected from you because he’s in contempt of court on your divorce decree. Your divorce decree told him he had to pay this, and he hasn’t. He can’t bankrupt that part of the divorce decree. He can bankrupt the actual loan, but it’s like child support in a divorce decree. It’s not bankruptable. You could go after him. Of course, he has nothing, so it would be useless to do it. If he had money, it’d be different.

You’re not bankrupt. The deal is you’re technically liable on this loan—as much as he was. The divorce decree does not have the power to take you off the loan. The attorneys told you correctly. The question is whether they told you correctly whether you’re bankrupt or not. I think the advice they gave you is probably somewhat accurate in that it depends on how aggressively somebody comes after you. My experience with a second mortgage trying to collect from an ex-spouse who thought she was released only to find out she was not in the divorce decree, it’s very difficult, and a very low percentage of the time do they get any money out of somebody like you. If you guys were to scratch up $15,000 or $20,000 with you and your husband’s great income and offer that as a settlement in full on this debt, you can do that. Then you reserve the right to go after your ex later when he’s got some money to get that money out of him. He was supposed to indemnify you against any loss as part of this divorce decree. Of course he didn’t because he went broke.

I don’t think you’re going to get any money out of your ex. I think it’s going to cost you $15,000 or $20,000, but I don’t think you’re bankrupt. If you don’t have any money saved, I’d be building up a war chest in case they decide to come after you. If they do, squeal like a little pig—like you never heard of this and never thought they could collect it from you. Act all innocent like you don’t know what’s going on, and then use that—even though you can’t legally hold that up—as a negotiating tool to get them down to $15,000 or $20,000.