Change from reaffirmed mortgage to non-reaffirmed

[LostInWI]

Hi all!! We just had our 341 mtg. yesterday for our bk7. When we met w/ our attorney prior to filing, I thought we had to choose either reaffirming our mortgage if we wanted to stay OR not reaffirming and getting foreclosed on. It sounds like (from what I read on this website) that we can opt to NOT reaffirm but 'stay and pay' or 'ride-thru'. The question that I have is that when we originally filed with the court, I signed a statement of intentions to reaffirm the debt on the house. Between when we initially filed and when we had our 341 (yesterday), I got cold feet thinking that allthough we'd like to keep the house, WHAT IF our finances continued to degrade and we couldn't keep up with the mortgage. I was afraid that we could end up in a shortsale or foreclosure with a defficiency judgement against us if we had reaffirmed. I asked my attorney and he said that since we never signed an actual reaffirmation agreement/contract, that we're ok. He claims that a statement of intention is not the same as an actual affirmation (that this would be a seperate step) and that I don't need to do anything. Any ideas?!?!?! I'm freaking out here!!!! Thanks!

[Chowder]

Some state law does not allow a creditor to repossess/foreclose if you are current on payments. You will need to find out if your state is one of them.

[LostInWI]

I guess my main question is the difference between a 'statement of intention' to reaffirm and an actual 'reaffirmation' and if it's ok to switch halfway thru

[Chowder]

You can change your mind. It wont be an issue.

[JoeBankrupt33]

I second Chowder. It's not reaffirmed until you complete the reaffirmation paperwork. I did this with a car. I intended to reaffirm (sort of - I just wanted to hedge my bet that the lender wouldn't repo during the bk), so I completed the statement of intention indicating that. But, I never reaffirmed and there was no problem. I didn't pay, they eventually got the car.

[aljohnson007]

IMO, you don't need to do anything, like your attorney said. Let the SOT ride like it is and if the mortgage company sends you a reaffirm, just don't sign it. If you change it to surrender, it may affect your DMI.

[Kingxray]

Hi all!! We just had our 341 mtg. yesterday for our bk7. When we met w/ our attorney prior to filing, I thought we had to choose either reaffirming our mortgage if we wanted to stay OR not reaffirming and getting foreclosed on. It sounds like (from what I read on this website) that we can opt to NOT reaffirm but 'stay and pay' or 'ride-thru'. The question that I have is that when we originally filed with the court, I signed a statement of intentions to reaffirm the debt on the house. Between when we initially filed and when we had our 341 (yesterday), I got cold feet thinking that allthough we'd like to keep the house, WHAT IF our finances continued to degrade and we couldn't keep up with the mortgage. I was afraid that we could end up in a shortsale or foreclosure with a defficiency judgement against us if we had reaffirmed. I asked my attorney and he said that since we never signed an actual reaffirmation agreement/contract, that we're ok. He claims that a statement of intention is not the same as an actual affirmation (that this would be a seperate step) and that I don't need to do anything. Any ideas?!?!?! I'm freaking out here!!!! Thanks!

It looks like you are from WI. I too am from WI (southeast) and had the same concerns as you regarding reaffirming our home. After all, who knows what the future holds? I asked our lawyer about this and he said that deficientcy judgments are rare and that it would cost the mortgage company a lot more money and time to file a deficientcy judgment than to simply foreclose. In this economy I tend to believe him, so we are rolling the dice and reaffirming.

As a side note, what is funny about this is that even though we signed and filed reaffirmation papers on our house, the UST filed a motion to dismiss stating that we cannot use the expenses of our house because we are surrendering it and that when we get discharged we will just foreclose on the house and walk away debt free. I guess that reinforces what our lawyer said about deficientcy judgments being rare. Good luck.

[tdawg]

It looks like you are from WI. I too am from WI (southeast) and had the same concerns as you regarding reaffirming our home. After all, who knows what the future holds? I asked our lawyer about this and he said that deficientcy judgments are rare and that it would cost the mortgage company a lot more money and time to file a deficientcy judgment than to simply foreclose. In this economy I tend to believe him, so we are rolling the dice and reaffirming.

As a side note, what is funny about this is that even though we signed and filed reaffirmation papers on our house, the UST filed a motion to dismiss stating that we cannot use the expenses of our house because we are surrendering it and that when we get discharged we will just foreclose on the house and walk away debt free. I guess that reinforces what our lawyer said about deficientcy judgments being rare. Good luck.

Sounds like the UST is an idiot with that logic. Did he say that you cannot use it on your Means test and you can't use it on your schedule J? Or just one of the two? I definitely need to have mine on my Means test, but I'd still be fine without it on my schedule J.

[AngelinaCatHub]

As your lawyer stated is correct. Those who chimed in are also correct. You do not know what this screwy economy may be going to do. 'Hub

[Kingxray]

Sounds like the UST is an idiot with that logic. Did he say that you cannot use it on your Means test and you can't use it on your schedule J? Or just one of the two? I definitely need to have mine on my Means test, but I'd still be fine without it on my schedule J.

Of course we are fighting it. Our first telephonic hearing is tomorrow. She is not allowing our housing expenses on schedule J, as she says we will not have these going forward because we intend to surrender our house, which of course is not true. We used only the IRS allowable housing expenses on our Means test. However, the UST claims the presumption of abuse arises-go figure!