I need help... In complete Limbo!

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Hello,

I really thank those that help others here and I will whenever I am sure of an answer.

Here is my problem..

Filed Chapter 7 Mid November... Petitioned to re-affirm 2 cars, first and second mortgage. The car creditors very quickly replied and have been re-affirmed. I have heard nothing from the mortgage banks. I stopped making payments back in November and have changed my decision to NOT re-affirm the mortgages and give up the house although I have not notified the Court or the banks.

1. Can the Court discharge with these open re-affirmations?

2. Do banks take this long to draft re-affirmation docs or are they pissed with the lack of payments and don't want to re-affirm? I am thinking any bank will propose re-affirming but probably demand I catch up payments pronto. Surely the Court notified them as they did the Car creditors or is it my responsibility to make creditors aware of re-affirmations...?

3. When the time does come and the Trustee wants to sell the house (1st mortgage bank is secure, 2nd is about 25k negative, 50% of what they are owed), do I remain in the house.

My current thinking is to wait until the banks respond to the re-affirmations, whenever that is (will the court wait indefinitely to discharge?), go to court and tell the Judge I have changed my mind. Also could accept the re-affirms and change my mind inside the 60 day window allowed.. I am trying to buy as much time as I can to save up as Income is still very low and I must build up money as renting will be a pain without substantial deposits.

Sorry for so many questions and Thanks in advance...

[OhioFiler]

Those reaffirmation agreements will never arrive and won't affect your discharge.

Stay in the house as long as you wish until they threaten to move you out. This will be a long long time.

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So the court will discharge even though I have not re-affirmed?? Why will they never arrive?? I need a bit more info please..

[OhioFiler]

So the court will discharge even though I have not re-affirmed?? Why will they never arrive?? I need a bit more info please..

It rarely occurs. The ride through is a de facto procedure in most districts. The courts don't try to force petitioners into reaffirmations because the petitioner indicated that was the intent. In reality, many judges would rule against a reaffirmation if it was not in the best interest of the petitioner.

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If the court discharges are the Mortgages (deficiencies) therefore automatically included? They should be since there were no court approved re-affirmations. I would almost rather use the court (reverse the affirmation intent) to sell the house as I believe they will take longer but they may not let me stay here while they sell it which the banks may or may not.

Thanks for your help..

[OhioFiler]

When you are discharged via bankruptcy ALL your qualified debts are gone. What keeps the mortgage company involved post-discharge is the lien they have on the property.

I don't understand what you mean by let the court sell the house. It's a pretty rare case when the court takes responsibility for liquidating a real property unless you have non-exempt equity in the house.

There is no need to notify anyone your intent to let the house go. Simply stop paying your mortgage and the lender will eventually begin foreclosure. This process typically take many months.

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Ok I was hoping to be protected from the likely deficiency of the Second Mortgage.

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Interesting... just received Affirmation package today for 2nd Mortgage and it's been assigned to an Insurance Company.

[StartingOver08]

IMO, don't sign the reaffirmation for the second, even if you think you want to keep your house. There is nothing you gain by signing a reaffirmation but a lot to lose.

[Nubeginning]

IMO, don't sign the reaffirmation for the second, even if you think you want to keep your house. There is nothing you gain by signing a reaffirmation but a lot to lose.

I have decided to tell the court I am not reaffirming the second and they may very well decide to liquidate to get the creditor some money though current value is a bit of an unknown. If it goes this route I wonder how long it takes and if I remain here..

[OhioFiler]

I have decided to tell the court I am not reaffirming the second and they may very well decide to liquidate to get the creditor some money though current value is a bit of an unknown. If it goes this route I wonder how long it takes and if I remain here..

There is nothing to tell the court. Just ignore the reaffirmation paperwork and you'll be fine. Don't even discuss it with the lender.

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Assuming at some time in the future there will be a forced sale of the house is it not better if the Trustee does it?

[StartingOver08]

If you surrender the property (don't pay your mortgage), the property then continues thru the normal foreclosure process. The bank may ask for a relief of stay to begin foreclosure during your BK or simply wait until your discharge to begin foreclosure. Note, the foreclosure may take an extremely long time in the hard hit states like Fl, Nevada, California, Michigan. It is my experience here in Fl the average F/C is taking about 2 yrs now (the process formally took 6 months in normal times!).

The Trustee does not handle the sale in a F/C. There have been a couple of threads recently where the Trustee wants to handle the sale in the case of a short sale (unusual). And where the Trustee apparently wants to value the property by sending an agent out and possibly putting the house on the market (very unusual).
Once you are discharged, your personal liability is also discharged. The F/C process is to formally 'return' the property to the lender by following your state's F/C process. The lender is enforcing their 'in rem' rights against the property only since you have/will be discharged in BK.

All of this is to say: let the lender foreclose. Stay as long as you can without paying, which can be quite a long time in some jurisdictions.

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Once you are discharged, your personal liability is also discharged. The F/C process is to formally 'return' the property to the lender by following your state's F/C process. The lender is enforcing their 'in rem' rights against the property only since you have/will be discharged in BK.

That clarified things a lot. My notified intent to reaffirm means nothing unless the court officially approves so by ignoring this reaffirm package the mortgage is automatically included in my BK.

Thanks..