I recently received an email from a blog reader asking about his obligations to his mortgage company when he does not reaffirm:
I have read your blog and you are very through so I write you with hopes that you might answer this question for me. I file Chapter 7 in 08, and did not reaffirm my loan. I am still living in the house and did make some payments. However, i have not for the last 8 months. It is my understanding that I must sign a document to reaffirm and that continuing payment in itself is not a reaffirmation…or? Well it gets a little more complicated. My house is valued at $410,000 and the bank has offered me a deal that is going to be hard to refuse. They have agreed to let me do a short re-fi in the amount of 180k. If I agree to that is that in itself a reaffirmation?
Here is my response: in most cases, when you take out a mortgage loan, you are signing two different types of agreements. The first type is a promissory note whereby you personally agree to make the payments. The second type of obligation creates a property lien, meaning that you, as the owner of the property, pledges that property as collateral for the loan.
More on Can You be Sued for Non-payment of your Mortgage if You Do Not Reaffirm?
I have been getting a lot of questions recently about reaffirmation and about the consequences of not reaffirming a mortgage loan. I have previously written about the consequences of not reaffirming a mortgage debt. The 2005 BAPCPA changes to the Bankruptcy Code attempts to force debtors to choose between reaffirmation or surrender of their collateral. The trend I am sensing both here in the Northern District of Georgia and elsewhere around the country suggests that bankruptcy judges are not particularly inclined to force this issue. In cases where the debtor cannot or will not sign a reaffirmation there seems to be a judicial acceptance of the old "stay and pay" process.
More on If I Do Not Reaffirm My Mortgage in Chapter 7, Do I Automatically Lose Title to my House?
Filed under Chapter 7 issues, Reaffirmation and negotiation by 
My colleague, attorney Scott Riddle, posted a very interesting observation in his Georgia Bankruptcy blog about the bankruptcy implications of Clayton County, Georgia's school accreditation fiasco. For those unaware of the situation, the Clayton County School System is about to become only the third school system within the past 20 years in the United States to lose its accreditation.
More on Bankruptcy Implications of a School Board's Loss of Accreditation
Thank you for your informative web site. I have 2 questions I am filing for SS as I am 63 my bill are current however I was laid off last year and my health is failing. If I file would I be able to keep my car? I owe 16K on it as low milage (17K) my son will be giving me the payments. Also I have been renting this small house for the past 5 years I have never been late with the rent do I have to notify the landlord if I plan to stay here? I own nothing but have 25K credit card debt all these bill are current but I have run out of savings
Christina
More on Retiree With $25,000 of Credit Card Debt Contemplates Bankruptcy
Filed under Chapter 7 issues, Reaffirmation and negotiation by
I have a question about the blog in Nov,2006. You said that filing bankruptcy can stop car repossion . But after you file chapter 7 do you get to keep the car and the debt is discharged or you can keep the car only if you promise to make payments on tht vehicle. Because I have been told the only way you can keep the car when filing chapter 7 is if you promise to make payments and you do not include it in your chapter 7 bankruptcy. I was told if you owe on the vehicle and place it in your chapter 7 bankruptcy you have to give the car back. Could you give me some insight.
–Fana
More on Do I Have to Give Back the Car I am Financing if I File a Chapter 7?
Filed under Automatic stay issues, Chapter 7 issues, Reaffirmation and negotiation by
Does a change in the Chapter 13 law that provides for "adequate protection" payments to vehicle lenders put the debtor's interests in conflict with the debtor's lawyer? As the final language to the BAPCPA changes to the Bankruptcy Code were being negotiated by lawmakers and lobbyists, a very interesting provision was included, most likely at the insistence of lobbyists for vehicle finance companies.
Filed under Chapter 13 issues, Reaffirmation and negotiation by
I have a few questions and I'm not sure how to get them answered so I decided to write to you after seeing your website. I really need some advice or guidelines and would appreciate your help. Please let me know your rates and I'll be more than happy to pay as I need these answers for peace of mind.
My Chapter 7 bankruptcy was discharged in September, 2006 in Atlanta. At that time, my attorneys told me to stop checking the internet for information because it would just worry me and to leave it to them. The bottom line here is that I wanted to reaffirm my mortgage and stated this at the 341 hearing. I didn't realize you had to actually sign an agreement for this to happen. I called my attorneys after I realized what should have happened and they told me they never think it is in the best interest to sign a reaffirmation on a home because the mortgage company will never come after it anyway if the loan is kept current. I've never been late with a payment. They acted like I was crazy to even worry about these things and reminded me that they told me to stop reading about it on the internet.
Since then I have always received a bill from my mortgage company (my house is an FHA loan-I don't know if that has any bearing on any of this) that has a disclaimer stating the bill is being sent for informational purposes only and is not an attempt to collect, etc. It is also on my credit report as discharged.
My questions are as follows:
1) Will they ever come after it even if I remain current? Could they wait years until there's equity in the home and then foreclose?
2) I've read that there are some ares of the country where keeping the house without a reaffirmation agreement has been protected by the Federal Court. Is this true, and if it is, is Northern Georgia one of those courts?
3) I just got married and will be changing my name. I'm afraid to even change it with them because I don't even like to flag my situation, am I crazy?
Also, I wanted to Quit Claim half of it to my husband but this would really be flagging it- am I right to worry about that?
Should I even consider doing that?
Thank you for your time,
More on Chapter 7 Debtor Did Not Reaffirm Mortgage – Is Her Home Now at Risk?
Filed under Chapter 7 issues, Reaffirmation and negotiation by
You may wonder who it is who creates the bankruptcy forms that we fill out. In 1922, the United States Congress established the "Conference of Senior Court Judges" – now called the "Judicial Conference of the United States" – to make policy and establish procedures for the operation of federal courts in the United States. The Chief Justice of the Supreme Court is the presiding officer of the Judicial Conference.
More on New Official Bankruptcy Forms Required as of October 1, 2006
Filed under General consumer bankruptcy info, Reaffirmation and negotiation by
Bankruptcy debtors often unaware that they frequently have an excellent opportunity to reduce balances and change payment terms on secured loan accounts.
This is especially true for furniture accounts, electronics, jewelry and sometimes automobiles.
More on Using bankruptcy to re-negotiate secured debt balances
Filed under Georgia Bankruptcy, Reaffirmation and negotiation by
