Is Cosigner off the hook after Chapter 13

[eajonesyk2]

What is the name of your state?What is the name of your state? Oregon

My Father cosigned on a mortgage loan for my sister and her husband who live in Ohio. They are four payments behind now and the house may be foreclosed on. If they are eligible for and file Chapter 13 will my Father be off the hook as cosigner for good. My concern would be that if they fail to meet the Chapter 13 terms(payments) that my Father would still be responsible as a cosigner.

Thanks for any advice.
Eric

 

[bigun]

Yep, he's on the hook if they can't stay current in the 13.
They need to look at the totality of the situation. If there's any equity in that house, they should just sell it and not get another party tied up in there financial problems.

 

[eajonesyk2]

Nuts

That's what I was afraid of. I agree they should sell the house. It is in a depressed area of Ohio(West Farmington) and they have very little equity in the home. I am worried they will have trouble selling it, let alone make enough from the sale to pay off the mortgage, realtors fee's, etc.
Is there a chance they could negotiate a lower mortgage payment in Chapter 13 filing?

 

[bigun]

No, the mortgage holder is a secured creditor and they don't have to take less than the agreed amount.

 

[eajonesyk2]

Thanks

Thanks for the advice. Would it be prudent to recommend to my Father that he "demands" that they sell the home and provide any payments to them that are necessary to prevent foreclosure and complete the sale? If my sister and her husband refuse or ignore the request to sell the home and remain in default, at what point would they likely try to contact my Father?

Eric

 

[bigun]

As cosigner, Dad really can't demand anything. He can just hope they are resonable and realize he's protecting everyone involved credit by making payments and taking care of any shortfall. That's a very generous offer on your fathers part and hopefully they'll see the light.
If they don't pay, and can't get chapter 13 relief the mortgage holder will look to the cosigner sooner rather than later. Impossible to say how long it'll take.

 

[eajonesyk2]

Thanks again for the all the advice. I will pass it along to my dad.
Eric