Reaffirmation Presumption of Undue Hardship

[chriselle]

I checked pacer today and my reaffirmation was reviewed and there's a notation that REAF UNDUE Hardship. I have a lawyer and signed the Reaffirmation agreement. I can't get a hold of my lawyer. the difference between mortgage and income after expenses is $219.

Will there be a hearing or my lawyer can rebut the presumption? On the reaff he already explained that we can afford to make the payments.

Will this delay my discharge? My last day for objection is on Monday. I am on an emotional rollercoaster already and been waiting for monday.

Please, any info on how I can get over this hump. I can not recind my reaffirmation. I have never been late on my mortgage, it's always a priority.

Thanks in advance to the kind hearted person who will answer this.

[DeadManCrawling]

Chriselle,

I don't know Illinois specifically, but it is common practice for judges to deny reaffirmation for the reason you cite.

And usually it is a good idea for you, anyway.

By not reaffirming, in most districts, you simply keep paying, and keep the house for as long as you pay. It is called "ride-through". The bank cannot take the home from you, but if you ever need to, you can leave without the bank being able to come after you.

[chriselle]

If only my parents are not on the mortgage, it will be a thank you. But I have caused them enough trouble. I have an attorney, the bank signed the reaff. It is flagged as presumption of undue hardship, but I thought if the laywer signs on it and the bank signs on it even if there's a negative the court will not do a hearing. Here are my questions really,

Can this delay my discharge?
Can I file a motion to approve the reaffirmation or do I need to motion since lawyer signed it?
Will there be a hearing?

JUSTBROKE...I know you are an expert on this.

[chriselle]

Thank you for the advice deadman.

[DeadManCrawling]

That complicates things a great deal.

If you are discharged of this debt, your parents are still responsible. I wonder how/if this will appear on their credit?

I cannot answer those questions, hopefully someone else can answer your original questions and offer some advice.

Best,

dmc

[chriselle]

I know deadman, I am not discharged yet. I have a week to go. from my research the reaffirmation will be reviewed by the judge and then he/she will notify if a hearing is necessary. I just don't know when? I just want my discharge so bad...this process ruined my thanksgiving, xmas, and new year already...

[LSUTiger32]

OK, same thing happened to me. One of two things have to happen.

1. Your lawyer signs off on it and it can be filed with the judge's permission. This did not happen for me because my lawyer refuses to sign them.

2. A hearing date will be set in front of the judge in the acutal BK court. You will have to convince him that it is in your best interest and that you can afford it. If he agrees, he signs it and it goes directly into the record and becomes reaffirmed. You will still get the standard 60 day period to rescind.

Hope this helps, PM me if you have any other questions about the process.

[justbroke]

Reaffirmation agreements are special. if you have an attorney and the attorney reviewed it, and checked the undue hardship box, then it must be reviewed by the Court and approved. This is usually done by a hearing on the matter, or the Court may look at it outside the courtroom (local procedure).

The reaffirmation process will not affect the date known as the bar date to determine dischargeability or to object to discharge. That date is always 60-days after your first scheduled 341 meeting. This date can be moved if the Trustee or creditor in interest has "cause" and asks the Court. Don't ask me what "cause" is, but it's a pretty high bar -- meaning that they just can't say, because they are running behind. They need actual legal reason, like you didn't provide all the necessary documentation or hindered or delayed their case. This usually doesn't happen and the bar date passes without anything happening.

Once that bar date passes, the discharge is entered within a reasonable time. In some Districts they use "auto-discharge" which will automatically discharge the case once the bar date passes! Most Districts don't use "auto-discharge" because it does cause discharges that weren't supposed to happen.

In either case, so long as the reaffirmation is "filed" before the discharge is entered, the reaffirmation is good. However, if the reaffirmation requires a hearing, the court will schedule a hearing and make a decision. Because the reaffirmation was filed before the discharge entered, nothing needs to happen if the Judge approves the reaffirmation. If the reaffirmation is filed after the bar date and the discharge is entered, the debtor can ask court to vacate the discharge for the sole purpose of entering the reaffirmation and granting another discharge. I just saw a case like this in Florida and the Judge did it without any issues. (This was a case with Ford Motor Credit who are notorious for repossessing if there's no reaffirmation. The debtor was being abundantly cautious.)

[lodibklaw]

I always have issues with which way to go on reaffirmations.

On the one hand not signing is good because it clears the debt. As others have pointed out the odds are as long as you keep paying for the house/car/etc that the bank/lender will not reposess or foreclose. They are perfectly happy to get their money and as long as you are current they have few options.

On the other hand if you do not sign then there is a good chance they will not report the payments on your credit history, and that could cause issues when you go in for a new car loan/etc.

It's one of those back and forth issues.

I know this does not directly bear on the issue, others have covered that it seems, but in the event that the reaff does not get approved for some reason I did want to point out there are some plusses to not reaffirming