Advice on Mortgage reaffirmation

[patrasta]

This is my first post. My wife and I are 10 months into our 60 month CH13 plan (70% repayment). At the time we wanted to keep house and signed reaffirmation agreements with the first Citi ($300,000) and the second HSBC ($82,000K). Well, an already strained marriage has forced a seperation months ago and my wife officially moves out this weekend. We will not be able to keep paying both , so for the first time, I just skipped the second mortgage payment. I have notified our lawyer of our news and he is working on a few options. He is going to try and pettiion the trustee to modify current plan and surrender the house or possibly file another 13.

I am not sure if these will work and am going nuts with all of the divorce talks. My question is, since we signed the agreement, do we have any hope that this will work. We now realize we should have walked from the home, but we were too "Good" for that at the time. Now I don't care who know or what happens. I just want to start over a new life and get rid of the two loans. Do I have any Chance?? What is going to happen now that I missed the payment on the second?

Thanks,

Pat

[CH33 Paralegal]

Did you really sign a reaffirmation on the second mortgage? Or is this reaffirmation in just in the figurative sense and not literal?

also, if you guys get divorced, that could create a conflict of interest for your attorney. The conflict is that one of you will be indebted to the other most likely, so the attorney will have a case where he's representing 2 debtors and one of the debtors is a creditor of the other debtor.

[patrasta]

Yes, we signed an agreement for the second mortgage.

[justbroke]

I don't understand. You're in a Chapter 13 and you signed a re-affirmation agreement???

[patrasta]

We wanted to keep the house, we signed/ filed in early 2008 when we had some equity in the house. Now that everything has crashed we have no equity. We made a mistake, maybe we didn't ask the right questions, out pride or stupidity, I don't know. I am asking what happens if I stop paying, I am trying to work througn having my wife gone and keep a strong front for my three kids. I know I am screwed but do I have any hope? I could keep paying both for four more years, but it will be very tough.

[justbroke]

Are you in a Chapter 13? Tell me you didn't sign a re-affirmation agreement in a Chapter 13?

[patrasta]

Yes! I am in Chapter 13, I now now we messed up, I can't go back. I came to this site for advice and maybe some support.
Do I have any options? If I stop payments on both , how long wil it take before they foreclose? I guess I then owe them the difference between loan values and what they sell for.

[DeadManCrawling]

I don't think anyone was intentionally being rude, they were just surprised.

I wonder about converting to a 7?

The reaffirmations are going to be an issue, but I can't say how big. Are they wiped out if you convert to a 7, or do they survive because you reaffirmed?

That is the key, I think.

Good luck

[justbroke]

Yes! I am in Chapter 13, I now now we messed up, I can't go back. I came to this site for advice and maybe some support.
Do I have any options? If I stop payments on both , how long wil it take before they foreclose? I guess I then owe them the difference between loan values and what they sell for.

I'm just wondering anyhow, because re-affirmations mean nothing in Chapter 13. So, never take these questions as questioning your tactics. Just trying to get enough information to make an informed critique.

• Where did you get the re-affirmation agreement from (the lender)?
• Did the lawyer sign (countersign) the re-affirmation agreements and file them with the court?
• How long ago did you sign and file these agreements?
• You're 10 months into your Chapter 13, right? Are you otherwise on time with payments?

My thoughts are that the re-affirmations mean absolutely nothing and are void. So, I don't think that re-affirmation is enforceable. Then, I think that you would have to motion to modify your confirmed plan and to surrender the property.

Other than that, this is the strangest case I've read so far. I don't mean to put your off and I didn't mean to seem shocked or alarmed, but I am... and didn't know that it showed in my posting.

[bksmith12345]

Yes! I am in Chapter 13, I now now we messed up, I can't go back. I came to this site for advice and maybe some support.
Do I have any options? If I stop payments on both , how long wil it take before they foreclose? I guess I then owe them the difference between loan values and what they sell for.

Hi Pat,

Please continue to post here. These folks, especially justbroke, have experience and are here to help.

Ask anything PLEASE! For your own sake. The info you get here is priceless. And, it is free. No substitute for a good attorney. But, I'll tell you from experience, probably better than most attorney's.

Nobody here wants to belittle or hurt you. We all only want to help. This thing we are going through creates a great comeraderie.

I wish you the best.

[bksmith12345]

I must have to add my attorney should be in the BK Attorney Hall of Fame.

[luadams]

Sorry to read you're separating from your wife. That's all you need, right? Stay strong.

I don't know enough about bankruptcy yet, but necessity is a good teacher and I'm learning fast.

From what I've read thusfar, I would agree with the poster that said conversion to a Chapter 7 might be your best option. Maybe you should look into it?

[patrasta]

My lawyer is looking into Option of converting to 7 and surrending house. He is also looking into modifying current plan and surrending the property.

We signed the agreements we got from the two lenders in July/August 2008; the lawyer did not sign.

We are on time with payments and have provided 2008 tax refund to trustee.

I agree the advice can be better then my lawyer. He also said he never encountered this.

I hope the re-affirmations are not enforceable, because if the lawyer fails, I will have to stop payments and foreclouse.

Thanks for everyone's advice. I got use to be in CH 13, but now with the pending divorce, I am back to no sleep and depressed. At least I now have told my parents and have their support. Wish I would have done this in the first place, again, fearful of shame.

[StartingOver08]

Do you have a pacer account? If so, look up your case and see if the attorney 'filed' the reaffirmation agreements.

JustBroke really knows his material - and if the attorney did not sign the reaffirmation agreement and they are not filed it is probable you do not actually have a reaffirmation agreement (or that it is void) which would benefit you tremendously.

[patrasta]

Yes I have an account, just logged on, but it's been 9 monhts since I logged on and the site looks different. I can't remember how to search. Will have to read the Manual I downloaded a while back.