To give Chase and Ally money or not to give - that is the question?!

[sh9730]

Ok, so, filed this morning.....so now Im onto the next steps. Not sure how to proceed on two fronts.

For now, on my SOI I indicated I plan to reaffirm my mortgage with Chase (Single 1st mortgage only FHA backed). As I have indicated in other posts, I have an agreement in place with Chase to enter into a repayment plan (not a modification, but rather pay a lump sum payment to start with and then couple hundred extra a month for 8 months to bring me current). Now there is a single line disclosure in my paperwork that says the agreement is void if I file BK, but that was expected. Every person I spoke with at Chase says they would honor this agreement even if Im in BK.

NOW, my first payment on this plan is not due until May 10th (2K even) and I will not have it til then anyway since I had to pay atty to file etc...

So, my question is....should I make that payment on May 10th as scheduled, OR since I have now filed BK, should I contact them and get some new agreement in place (probably a reaffirmation since I wont be able to completely catch up on my arrears before my BK discharge)? I dont want to give them 2K and then have them STILL continue with Foreclosure proceedings, but on other hand, if they are willing to honor the existing plan (or better maybe?), my intention is to stay in the house.

Next, a similar situation on my leased vehicle...in my SOI I indicated my intention to reaffirm, as I need a car, but now I am reading here and elsewhere that I am likely to get some offers from dealers etc soon to maybe by something a little less expensive...does anyone have experience with ALLY as to whether they will negotiate at all while in BK? Or is it a bring it current or nothing prospect with them?

Thanks as always.

[Freddy03]

Ok, so, filed this morning.....so now Im onto the next steps. Not sure how to proceed on two fronts.

For now, on my SOI I indicated I plan to reaffirm my mortgage with Chase (Single 1st mortgage only FHA backed). As I have indicated in other posts, I have an agreement in place with Chase to enter into a repayment plan (not a modification, but rather pay a lump sum payment to start with and then couple hundred extra a month for 8 months to bring me current). Now there is a single line disclosure in my paperwork that says the agreement is void if I file BK, but that was expected. Every person I spoke with at Chase says they would honor this agreement even if Im in BK. NOW, my first payment on this plan is not due until May 10th (2K even) and I will not have it til then anyway since I had to pay atty to file etc...

So, my question is....should I make that payment on May 10th as scheduled, OR since I have now filed BK, should I contact them and get some new agreement in place (probably a reaffirmation since I wont be able to completely catch up on my arrears before my BK discharge)? I dont want to give them 2K and then have them STILL continue with Foreclosure proceedings, but on other hand, if they are willing to honor the existing plan (or better maybe?), my intention is to stay in the house.

Next, a similar situation on my leased vehicle...in my SOI I indicated my intention to reaffirm, as I need a car, but now I am reading here and elsewhere that I am likely to get some offers from dealers etc soon to maybe by something a little less expensive...does anyone have experience with ALLY as to whether they will negotiate at all while in BK? Or is it a bring it current or nothing prospect with them?

Thanks as always.

If it's not in writing I wouldn't believe them.

[Pandora]

+1 on Freddy's post - Unless its in writing... count on nothing.

Other thing you need to check on is if you apparently can pay "extra" to catch up arrears on your mortgage, but are filing Ch. 7 - I believe the chances of you being pushed into a 13 based on DMI is highly likely. Make sure you check with your attorney how it will all work in the trustee's eyes.

ETA: also - make sure you find out if paying that extra will be considered preferential since its over and above your regular mortgage payment.

[sh9730]

Hmmm.....never thought of the "extra" as being preferential since really all I was doing was bringing it current...but maybe so since in essence I am paying a debt back...I ll check with my atty...maybe I ll actually come out with a better deal with Chase then if they dont want to foreclose....I had to play it this way to get filed ASAP for other reasons knowing the risk that Chase may not deal once I filed, but we ll see how it goes....

Any other thoughts/opinions from anyone?

[sh9730]

OK, my atty just got back to me - barely...very short email answers to my specific questions. But, I asked if there were any preferential payment issues here, or because I would be making these payments AFTER filing the CH7 it did not apply and he answered "yes", saying that apparently the preferential payment issues only apply to payments made to creditors BEFORE filing. If anyone knows different please let me know. Again, I am in AZ district.

Also, atty says that (at least here again in AZ) trustees do not approve reaffirms and this is between me and the creditor.

As for getting pushed into CH13, that may happen depending on any Adverse Proceedings I get and whether they can get settled.....but apparently my atty is comfortable that my income and DMI is ok to stay in CH7.

Still open to any other views/opinions....so now I guess I will wait and let Chase get notified of the filing and then call them and see where we are at....I am not going to give them 2K until I am very comfortable it isnt "wasted" money.

As of now Chase has only provided me with a NOD, and I dont think they have gone any further in the process yet (since they were under impression we had repayment agreement in place). With that said, my guess is it is pretty unlikely that by the time they get the stay lifted (if they even try at this point) etc, that they will be able to sell this out from me before discharge, right? Maybe they can move faster than that, but do they in real life?

Of course if they do, I still can always convert to a CH13 if need be and it is right thing to do.

What happens if I do NOTHING (no contact about the existing repayment plan or anything)? As long as they dont sell before discharge is there ways to still work out new plans with them AFTER the BK is discharged?

Thanks....I know Im not the only one in similar situations...and I have tried to read all the posts....but still not 100% on all this.

PS - should this get moved over to the foreclosure forum?

[btbeme]

Also, atty says that (at least here again in AZ) trustees do not approve reaffirms and this is between me and the creditor.

This is almost always true in AZ lately. But, you should definitely APPLY for the reaffirmation. The judge will deny it, but since you APPLIED, as the law states, you should enjoy the protection as if it were approved.

But, you do need to work it with your lender. Not all of them heed the judge's warning about repossession, and untangling that mess can be a big time waster, at best.

[sh9730]

BT,

Thanks....but of course like all of this, answers beget additional questions! I thought my atty was saying that the trustee's werent involved in the in the reaffirm process (hence didnt care what the creditor and I do or do not agree to), but it appears you are saying that they actual [I]disallow[I] the reaffirmations?

If this is the case what is the reasoning for applting again then? Is it because I get the benefits of NOT reaffirming (i.e. the arrears, defiency etc are all IIB as other posts in this forum say is best way to go), but also whatever leverage I might have with Chase to get them to work with me since I they perceive me as sincere?

Im confused? Im just trying to decide whether I should call Chase and try and keep my existing repayment plan in place? Or start to negotiate something completely different? In either of these cases should I do it via the reaffirmation process, or not as so many here on the forum suggest? My desire is much to the side of keeping the house if at all possible. As you know, here in AZ my only FINANCIAL risk of the reaffirmation is that if I default at a later date the FC shows up on my credit later and IF after 2012 I could be liable for the tax hit on any deficiency. But the positives are that I would get a positive tradeline on my credit report if I did reaffirm.

But you seem to say the reaffirmation (at least officially) is a moot point here....so what are my best options to proceed?

Thanks so much....I love learning new stuff, but of course wish this wasnt the subject I had to learn about!

[daylate]

I'm not sure, but I don't think trustees are the ones who approve/disapprove reaff's. I think it is the bk judge. Not sure if that changes anything but I thought I would throw it out there.

Plus, have you read the sticky thread on why reaffirming a mortgage is a very bad idea? If you haven't I think you should. If you have and are still leaning to reaffirming good luck.

[sh9730]

Day,

OOK. Thanks...sheesh...maybe I made this all too complicated. (Seriously I can do that!)

I just want to know what others would do at this point - I ve filed CH7, want to avoid CH13 if possible, but keeping the house is a high priority. Should I:

A - call Chase and try and try and just keep the existing repayment plan in place? Renegotiate a different agreement? If either, via reaffirmation process or not? (Keeping in mind in AZ I will not be liable for any deficiency at a later date).

B - Do nothing, keep all the money I WOULD HAVE given them while in BK process, then see if I can work out something AFTER discharge - or is this tooooo risky to wait, especially if they file a motion to lift the stay at any time during the process.

C - Do nothing, and then if they file the motion to lift stay just automatically go to a CH13?

Thanks! I know Im driving you all crazy.....hopefully someday I can help others via my experiences!

P S - yes I read the sticky on reaffirming - awesome post! But since so much of the reason people DONT want to do it is because they are liable for any deficiency if they cannot keep up with payments later, I am still willing to entertaining reaffirm since in AZ (other than possible tax implications) that is not an issue. Plus, most of that thread applies to people who ARE current and plan to remain current, whereas I am NOT current at present.

[btbeme]

Recently, in AZ, most - not all - BK judges will disallow a reaffirmation unless you or your attorney essentially force the issue.

According to several recent AZ readings, the act of APPLYING for a reaffirmation is what protects you from the creditor, whether or not the reaffirmation is allowed by the judge. By applying, you get the armor plating...even if the reaffirmation is disallowed.

Judges have been warning creditors that they are playing with fire if they pursue the repossession of the property after the reaffirmation is applied for - some do not get the message.

A great link which explains this: http://www.arizonachapter7lawyerblog...ted-death.html

[tobee43]

totally agree...don't UNLESS it's in writting because they lie...big time!

[sh9730]

Bt,

Thanks so much. BTW I have another post on this that I tried to be more clear about - sorry for the duplication.

I will definetely read that blog entry - BUT, what does that mean for me? I should go ahead and call Chase, they might (or given that I am behind might not) ask me to apply for the reaffirmation? Then, even though the court wont approve it, as long as I APPLY for it, AND Chase and I can come to agreement (again keeping in mind that as a CH13 specialist on my other thread points out Chase may have no interest in a reaffirm since Im close to 4 months behind) I am protected as long as I live up to the new agreement?

Im just looking for real world suggestions to try and keep the house short of converting to a CH13 and without making the court mad.

I think my new post (titled Reaffirming when BEHIND on payments) is a little more clear as to what Im asking..

But thanks!

[btbeme]

I wouldn't reaffirm a mortgage in AZ for any reason whatsoever, unless this house is extremely valuable in a historical sense to you and your family and you have big upside equity in it. Reaffirming a mortgage that is at break-even or upside down makes no sense to me at all, in any way shape or form. The last thing a bank wants to do is repo your house. In AZ, just check the "ride through" box, pay on time, and nothing will happen.

A car is different - it is easy to repo and resell. If you want to keep a car, apply for a reaffirmation. That is your best bet.

I didn't reaffirm anything except a van I know I wanted to keep (only 5 payments left on it). I paid the van off the week after discharge using $$$ I saved by not paying my mortgage. 10 months since my last mortgage payment, I am still in the house. I plan to relocate once I receive a Notice of Default, which starts a 90 day clock ticking in AZ. I already have a rental lined up, and plan to negotiate a "cash for keys" deal with my mortgage bank once they give me an NOD. In the meantime, I am debt-free, and have almost $25k in savings after clearing the deck of all my bills and debts.

Bottom line - reaffirm a car you can AFFORD and WANT to keep (and falls under the $5000 limit in AZ), nothing else. Just my opinion.

[sh9730]

BT,

Thanks again soooo much for taking time - Im getting closer to understanding. SO, in my situation, being behind payments - your reccomendation is?

My concern is that if I just pay as much as I can, but am still behind on my payments by discharge, that Chase will then still have rights to FC and I ve wasted all that money that could have gone elsewhere, including a conversion to a CH13? But is it your view that as long as I am making steady payments and am catching up, the real likelihood of them proceeding with FC in AZ is low, and I ll probably be ok (I grant you are in no position to make any guarantees!!! Just looking for opinions)?

Thanks...as for my car with Ally....yeah....Im behind on it too....but will probably just let it go....I kept it as reaffirm for now because if we do have to onvert to CH13 for any reason, I want that payment to count into my monthly expenses....

[btbeme]

If you reaffirm a mortgage, it will not stop a foreclosure. The only thing that stops a foreclosure is making good on any past payments, or hammering out a WRITTEN agreement with the bank to do something else - and living up to that agreement. And, I would pass that agreement past a contracts attorney with a LOT of experience in the area before signing it. Reaffirming a mortgage that you are 4 months behind on will give Chase the option of moving to immediate foreclosure, and they will get the automatic stay lifted even while your BK is still in process. Don't reaffirm. Don't.

Since virtually every homeowner in AZ is upside down AND rental properties generally cost 25-50% less per month than most mortgages made in the last several years, I am curious as to why you want to keep the house. Think hard about that. You can save hundreds or even thousands a month by renting. Buy another house you can afford in 3 years - the AZ market will still be in the dumpster, trust me.

Again, just my opinion. But I recommend that you speak with a couple GOOD attorneys here in AZ before you do anything. My opinions are framed with what I learned from talking to over a dozen of them before my own BK.