Reaffirmation - Mortgage - Please Advise

[mickeyme]

My Ch 7 was discharged Jan 09'. I told my lawyer I wanted to reaffirm our condo and she said it was done but when I spoke with the mortgage company they said it was not reaffirmed. I understand I can stay in the place as long as I make the payments but times are only getting harder and we may have to walk away at this point.

Now that it almost a year from our discharge and our credit beginning to bounce back I am afraid to make any late payments. My question is since my payments are not helping my credit score will missing the payments hurt it? I hate to come this far just to have to start all over again.

Also...we are trying to have the loans modified (aka the Obama Plan) but if we do does that make our place reaffirmed? I don't know if I should stay or if I should go. We were able to keep the BK on the down low from our friends and family but if we lose the place won't that be public record. I guess wer shouldn't care as they are not paying our bills.

ugh...I just want to be done with this already...

this is my first post so thanks in advance for the info.[/FONT]

[laurannm]

Assuming that in fact you did not reaffirm your mortgage (which you should verify by either contacting your lawyer or logging into Pacer), then making late payments will not hurt your credit score. Your mortgages should be displaying on your credit report as closed\IIB, meaning they can never report a late payment going forward. You should check your credit report to verify that this is the case

If you are having trouble making your payments and you are upside down on your mortgage, then walking away probably makes the most sense financially. Again though, you want to triple-check on the reaffirmation agreement before you do anything.

While it is true that foreclosure is public record (and usually the auction\sheriff sale is published in the newspaper), I personally wouldn't worry about it. You need to make the decision that is best for you and your family, and not worry about what others may think. Besides, you wouldn't be the first person to foreclose, and you certainly won't be the last

[mickeyme]

Thank you laurannm. I spoke to my lawyer today and we only reaffirmed our two cars. Do you know long it takes for them to come in and kick us out if we stop making our payments?

[laurannm]

No problem

Tough to say how long you would have before getting kicked out. Even though you didn't reaffirm the lender still has to follow the same foreclosure process and all applicable state (non BK) laws. Plus how long it takes can very from lender to lender. Seems like though in most cases you are looking at a minimum of 3 months, but in all probability it could 6 months or more

[Trybaby]

Have you tried to sell it? If you aren't unside-down you might sell. Not sure if you can keep any money since the debt was discharged. I'm always an advocate of keeping real estate if you can.

[DebtEnder]

You can always sell it. If you can sell it for more then the lien is worth then you can certainly keep the excess. So long as you can pay off the lien to get a free title you can sell it for whatever you want.

Not sure how income tax issues would work out however. I don't think they would really be affected by the BK. Just how long you lived there etc etc.