Ride-thru-option...instead of reaffirming.

[IamIrene]

We're just a few days from filing no-asset Chp7...just waiting for our attorney to get everything together.

We have an ARM that we will not be reaffirming. Lawyer suggested we apply for HAMP before filing for Chp7. I quietly choked back my disbelief as I do know a thing or two about the futility that is HAMP (mostly from posts here, ty!, and from other online research), not to mention the frustration and time needed to go through the process only to (likely) be turned down at the end of it.

We have pending litigation (small claims - medical bills) with possible garnishment coming as soon as May 1...hoping to file prior to that. So, I have been reading up on the "ride-thru-option". Found a very interesting article from 2009: Ride Through Option for Real Property Survived BAPCPA (stjohns.abiworld.org/node/28). I'm curious to know what anyone may have experienced in regards to this possibility.

I know there are others who have been in our situation. Hoping for some advice as I am actually pretty scared about not reaffirming and having to move right away. All the usual fears (rental qualifying, moving, foreclosure, etc)...just looking for some help/hope.

[BladeBk]

The lender already has a secured interest. There's no reason for you to reaffirm. If you don't make the payments the Lender has a lien which is not discharged in the Chapter 7. So, if you did not make payments after filing the BK, its likely the Lender will file for relief under the automatic stay provision and request to foreclose, or it may just wait until the BK is finished and foreclose after the discharge. But as long as you keep current with the payments there is no incentive for the lender to foreclose.

BladeBK

[jst4f]

Interesting article. I wonder how many other states will accept that ruling; , it was a CT ruling. Our lawyer (CA) is recommending that we do the same, ride through, on all of our real estate properties: home and rentals but we won't file for about another month so I can't offer any insights. I do recommend that you find the Sticky note on not re-affirming any loan. It is in the Chapter 15 BB. It is also good reading.