My Lawyer recommending to NOT reaffirm the house (i am current and keeping it)

[azviolet]

Hi there,
I read the thread on Reaffirmation, but I want more specifically to know your personal experience from reaffirming or NOT reaffirming.

My lawyer doesnt recommend it, nor, he says, do most attorneys in AZ. I am current, keeping the house and car (chapter 7) and had my 341 hearing today which was quick and painless.

I see the pros to not reaffirming. The con I see is the fact that the bank wont report my payments to the credit bureaus. But whatever, I am keeping my car current so that should help some.

Doesnt really make sense to put myself at risk by reaffirming a house that I am in the HOLE with (the housing crash dropped my home value to $110,000 and I owe $208,000 on the loan)!! I wouldnt want the bank to be able to come after me later for the difference of the sale price and what I owe (IF i leave the house, which in this state, you really have to leave it literally. The equity wont be back for years!).

Thats how I see things. Am I missing something?
Thanks!!

[BKlooker]

Hi AZ.....welcome to the boards!

I would NOT reaffirm a home that underwater for all the pasta in Italy! I am sure you will get a chorus of people behind me telling you the same. You would be stupid to do so. You are right that the downside is you no longer own it, so therefore you no longer get the benefit of it on your credit, but it sounds like you haven't owned the home long if it's that far upside down, so walking away now and starting fresh and getting something cheaper with a better chance of recaping value in a few years is likely your best bet for a sound future. It will likely take you close to a decade to get the house 'right-side up' again if it's that underwater....what's the point of BKing if you are going to have that stuck over your head?

And like others will tell you, IF you do ever decide to give up and walk away, if you reaffirm, you will get likely seriously screwed, both on your credit report and for the deficiency amount. They could get a judgment against you for the difference, and then on top of that you will have both a BK AND a foreclosure in your name on your record, which is going to put you much worse off than if you simply don't reaffirm.

My 2 cents...I am in a similar situation with my home, and I wouldn't reaffirm if they offered me cash to do so...it's just not wise. Stay & pay as long as you can/want and decide to move on, then stop paying, save some money for a few months, and move on.

[tcreegan]

Hi azviolet!

bank wont report my payments to the credit bureaus. They can, give them permission in writing.

Tom in Colo

[BKlooker]

Hey tc....what happens if she does that and then stops paying and walks away? I mean, one way or another, she is going to leave the house eventually....couldn't they stick her with a bunch of late notes up until they fully forecloses?

[IBroke]

BKlooker - that's an interesting question - I'd say if you ask them in writing to report your future PAYMENTS...that doesn't necessarily mean you authorized them to report future MISSED payments. Well, I'm not a lawyer but maybe the "devil is in the detail"..

[tcreegan]

Hi all,

You got it right BKLooker, you don't want to ask them to start reporting unless you have positive stuff to report!! No sense shooting yourself in the foot....

Tom in Colo