Don't want to lose my house and cars!

[Mark80]

I was told I could keep my home and cars during the Chapter 7, now all of a sudden I am reading a ton of stuff on how its pretty much up to the mortgage and auto loan holders if they allow you to keep them. I was never told "how" to keep them but I for sure do not want to lose anything. Is there a way to lock up all the loans by reaffirming early or something to keep them happy? Or do you actually do the reaffirming thing after the court date? I don't have a clue on how to do this and just found out today it even existed! Any comfort would be appreciated, as well as some direction on the best steps to take to protect everything.

Also It was never mentioned at my filing that my accounts needed to be 100% caught up or I would lose them! I am slowly getting caught back up on my mortgage, but it wont be by the time I file. What should I do?

Any insight is appreciated, I am completely freaked out tonight.

[JRScott]

Hi Mark, you might could call the mortgage company and see if they would move 1 payment to the end of the plan if that would help bring you current. Sometimes they'll do stuff like that.

I think most reaffirmations are signed after the 341. However I'd only sign a reaffirmation if you absolutely have to.

[hopeforus]

Why does everyone say to sign only if you have to... is a reaffirmation bad? I know in our state we can't do the through thing... pass through? drive through? the term is not coming to me right now lol What is the negative of a reaffirmation?

[JRScott]

It's called a ridethrough hopeforus. If your state doesn't allow it then you'll have to reaffirm.

The reason many advise not to reaffirm is that in reaffirming you are subjecting yourself to the debt. If something was to happen later on and you for some reason could not make the payments then they could foreclose but you would still owe any deficiency balance if you reaffirmed, whereas if you did a ride through you'd owe nothing.

[hopeforus]

Ahhh ok, I didn't realize this. Ohio really has nothing going for it bk wise does it? LOL I don't even know how much we have left on our van. It's a 2003 and we bought it just over 2yrs ago. I'm not too worried about it anyway. We can't lose our van. We can lose our house since we don't want it anyway but when you have 4 kids you kind of need to get them around lol

Thanks for the term reminder... drive... ride... same difference right? lol

[TEW]

I did not reaffirm anything and I'm glad I didn't I have a car was going to keep but it's to expensive so I am going to turn it in.

[Mark80]

I don't think the mortgage company will work with me now that I filed. They even locked my account access down. I was up all night trying to find ways to borrow money from people to try and get caught up. I didn't know I had to have it caught up before my court date or they would file a judgment to allow forclosure.

I need both my vehicles and home, without just one of them I would not qualify for Chapter 7! I do not want to lose them anyhow, and if I was caught up I would be fine paying them. Its just the getting caught up part thats been tough!

I am going to call my mortgage company today and pay on the one loan (I have an 80/20) to get that part out of default.

The reaffirming is very confusing to me, some of your guys say to do it, some not. But my main concern now is not being out in the street and then bumped out of my chapter 7!

[laurannm]

Do some searching around on these boards and you'll find quite a few threads that discuss reaffirming at length.

Most reaffirms are signed closer to discharge, primarily because it takes time for lender to get the agreement to your lawyer, get it signed and filed, etc.

In a nutshell, you really don't want/need to reaffirm your mortgage unless you are forced to (such as if your state doesn't allow ride-throughs, like you mentioned earlier). Reaffirming offers almost no benefit to the debtor, other than the lender MAY start start reporting your ont-time payments to the credit bureaus again.

You definitely need to be current with your mortgage when you file, otherwise the lender COULD file a motion to lift the stay (the trustee at our 341 actually asked us about this as well). However, I would call them anyhow and try to work something out. Given the current housing crisis, they might be more willing to work with you rather than foreclose and get stuck with yet another house.

[AngelinaCatHub]

Mark I think the explanation of the reaffirmation was pretty clear by the folks but maybe in different words, it will be clearer. When you reaffirm, you put that item outside the bankruptcy and it will not be acted upon but you will NOT have bankruptcy protection from it. After your discharge, and you lose your job or something comes up and you cannot pay for the item, they can sue you and hold you accountable. Your Trustee must approve of any reaffirmation and the mostly do. If you are so upside down, they may not approve.

A ride through is the item is within the bankruptcy, but you choose to pay on it anyway. The creditor is not allowed to bill you at that time so be carful to make every payment and get a receipt. You MUST be up to date and keep it that way. After discharge, if you miss one payment, they can foreclose, however you have the protection of the bankruptcy and they cannot do anything other than take the item away as a secured asset. There is advantages to both ways as well as disadvantages. My budget is pretty protected so I knew I could pay for may car, so I reaffirmed it. Now if I had a rocky job in this economy, I would prefer a ride through as if I got fired, and could not pay, I could just give the car back.

I hope that answers your question. ‘Hub

[Mark80]

I have a solid job within my family business, been here for 13 years and will someday be taking it over. I don't have any fears of that, however if reaffirming protects forclosure, and makes things not so touchy with my lenders I think it would be a good idea in my case. However it seems thats not even an option until after my 341, so what do you guys think I should do in the mean time? Is there something in particular I should be asking my Attorney?

[Mark80]

Something I just found?

Buried in my paper work I noticed a sheet called "Chapter 7 Individual Debtor's Statement of Intention" with both my auto loans and home loan listed with the boxes marked "Intention to Reaffirm".

Is this something that gets sent at the time of filing to your debtors? Or just mixed into the paper work of the filing for the courts. I was just hoping that they already got notified my intentions when they found out I was filing? Possibly staving off some threat of forclosure / reposession.

I got a call into my Attorney now but who knows when I will hear back from them, if anyone has any idea on this and can put me at ease I would appreciate it! Thanks!

[DaisyMae]

Mark, are you sure of yourself?

Ohio is in the trenches. Certainly you already owe much more than your house is worth, and values are expected to fall another 20% just in 2009. It's only going to get worse. And you are already delinquent, yet you claim 'good family business', 'no problems'. You already have problems. You ought to hit the brakes. You sound panicked and about to act in haste. Ohio sucks for exemptions- BUT it can take TWO YEARS to foreclose a house in Ohio. That's a long time you could be living free. If you reaffirm, then file, then lose that house- then you are liable for that mortgage regardless of whether you foreclose or not. If you file, and do not reaffirm, then you are not liable for the mortgage if they foreclose. BK is a good time to let an upside down house go away. Why hold on to a sinking ship, at the same time you are reaching for your oxygen mask as the plane is crashing to the ground??

[DaisyMae]

More reality check for the Ohio man:

Mark- let's say that you think have some equity in that house. You paid $150,000, the house is worth $200,000 and you want to 'save' that equity of $50,000. The exemption there is $5000- aside from the fact you are already delinquent, so no longer have $50,000 in equity- the Ohio exemption is only $5000, so the balance of your home equity would be taken by the BK court. So you have nothing left, but payments that must be out of line since you are already delinquent. This is the shock value of what is going on.It's the same situation if you have vehicles that are upside down- this is your chance to get out from under crushing debt...

[Mi Bankruptcy]

Hi Mark,

I was also concerned about this issue( mostly for my home) Here is the link regarding reaffirm or not to reaffirm. I expressed my fears and concerns and got allot feed back. Hope this helps.

http://www.bkforum.com/showthread.php?t=29878

[DaisyMae]

Oh my goodness..

I just saw that you have already filed???????????