Lets ask this ? this way - Reaffirmation when BEHIND on payments.

[sh9730]

Im still trying to figure this out. Im finding a lot of information on this and other boards about how reaffirming a Mortgage when you are CURRENT is not a good thing to do. I understand the thinking on that for the most part.

But, what about when you are BEHIND on payments, have filed, but still want to stay in your house? This is the situation that I am in. I apologize to those that have read these details in other posts, but I still really have no direction to go and my atty is not really understanding my question either, so Im hoping to get my ducks in a row with at least some idea before I go to him again. So....

I am currently behind almost 4 months on my mortgage. I have filed and have a case # for CH7. SO, the stay is in effect.

My last contact with my loan holder (Chase Mortgage) was to enter into a repayment catch up plan with the first lump sum payment of 2K even due on May 11th. Subsequent payments of about 1550.00 per month (my "normal" payment is 1215.00) for 7 additional months and then I will be caught up. BUT, I will not be able to get current before the 341 hearing, and almost assuredly wont be totally caught up before discharge even (although I will be close by then).

SO, my initial thought was to contact Chase, see if they will honor the original repayment agreement, realizing they would likely want me to reaffirm? In the alternative I would even try to work out a different (even better) repayment plan with them, but again I am sure they would want to reaffirm.

My atty says this is all between me and Chase and his words are "trustees do not approve reaffirm agreements". I interpreted that as that they dont CARE what happens as long as no equity involved in the house....but some others here and elsewhere are saying they WONT approve a reaffirm if I am behind? So Im not sure which it is....they dont care, or do care and just wont approve?

I completely understand the risks of reaffirming...and if I was current I would completely follow everybody's advice here and not reaffirm. But since we are non-recourse here in AZ so some of those risks are mitigated to a degree, and I have other reasons (beyond sentimentality) for wanting to stay in the house (run biz from here not THAT upside down etc)...

But what I dont want to do is start giving Chase money and then have the court disallow, or Chase foreclose anyway......

I realize there may not be any good options here....and I always have the option of switching to CH13....but short of that choice, does anyone here have suggestions as to what I should do?

Again, my inclination is to contact Chase, work out either the existing, or a new agreement, even if that requires reaffirmation....but Im worried about the court (whether trustee or BK judge - whomever is involved with reaffirms) saying not allowed AFTER I have already given Chase a couple thousand bucks or whatever?

So, did I explain this better this time? Thanks again for any help in advance....

[AtlBkAtty]

I'm confused as to why you filed a 7 thinking you could reaffirm the debt when you're behind on it. I'll admit that I've done many more 13s than 7s so maybe some of the 7 gurus can add to this, but I don't know of any banks that will offer a reaffirmation agreement to a debtor who is 4 months behind.

Being 4 months behind and wanting to keep the house sounds like an automatic 13 to me, and I'd love to be enlightened if I'm wrong.

[sh9730]

AT,

Thanks....yes, I knew there was not a guarantee they would reaffirm, but since they had already agreed to a repayment plan before I filed, that I will be able to live up to, that maybe they would agree...there are other aspects of my case that may also force me into a CH13 in the end (some charges not quite aged enough - but my atty thought likelihood of AP on those was low enough that trying for a CH7 initially was worthwhile...then if we cant settle for low enough etc we ll go to CH13). If that happens of course, then this entire mortgage question is moot.....but for now Im in a CH7 and if I can make that work it is clearly better for me given the amount of debt I am talking about etc...

SO, I guess what Im looking for is there anything that the COURT will object to if somehow Chase and I come to agreement. Once Im comfortable with that side of things, the next step would be to call Chase and see what they say....then go from there. But if the court is going to reject anything, why waste the time..and potentially money.....my atty seems to think no - the court doesnt care, but I do read otherwise here and elsewhere?

Thanks again....

[jemma]

I do not know if this will help you but I can tell you what I was told. I filed chapter 7 and was told if I wanted to retain my home, stay current on the payments. I was also told not to reaffirm it either. Also, told if I was behind in payments and wanted to keep it, had to redeem it. So, from that I gathered, stay current on payments and be fine with chapter 7. I'm guessing if you are behind in payments and want to stay, it would be turned to a 13 or you would have to redeem it by paying all your back payments. I'm not sure so hopefully you can find the answer you are looking for. I looked at my paperwork and it asks on there what you plan to do with secured property, like your home. Do you know what your lawyer checked on those boxes?

[sh9730]

Thanks Jemma,

He checked reaffirm. Again, the thought was that maybe they would consider the agreed to repayment plan as good enough to be reaffirmed. Again, once I get a little more information as to what the COURT cares about, then I will call Chase and see what they say. I suppose there is the POSSIBILITY (remote) I could get current before DISCHARGE, but no way before the 341 hearing. Does anyone know if that would be good enough?

[sh9730]

ATBKAtty,

BTBEME posted this in my other thread on this topic - apologize to all for the duplication - I just thought posting this new one in the manner I did was a little more clear. But he says the following:

"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 "


I still dont know what that means I should do though - try to reaffirm or not!??!

[AtlBkAtty]

sh9730,

Thanks for that link. I like that Arizona judge's approach and we have judges here in Georgia who follow suit even though I believe the 11th Circuit Court of Appeals has pronounced pass-throughs d.o.a. with BAPCPA.

Your situation still has a little twist to it, though. Let's say you and Chase do agree and present a reaff. If the judge disallows it, there seems to be a difference between "pay and stay" on the one hand and still being 4 months behind on the other.

Please keep us updated on this.

[sh9730]

Yes, I do have the twist - but based on some more conversation with BT on my other thread on this topic (and elswhere) - I MAY now lean towards not contacting Chase at all pre-discharge, see if the file a motion to lift the stay. There is some belief by many that they may either not have the desire, or cannot get it accomplished given workload, to actually file for the lift, especially given the state of housing here in AZ. Then if they dont do anything pre-discharge I will contact them afterwards, and see what we can work out (I will bank and hold all the monies I would have given them anyway). This will allow me to NOT reaffirm as many here suggest, but still have an opportunity for workout post discharge.

Now, if they DO file to lift the stay, then I will talk to them and see if we can work out a plan - hopefully without reaffirming, or in the alternative if everything else is equal to my choices I would make today, convert to a CH13.

I ll keep you updated. Thank you for your input.

[despritfreya]

sh9730,

You asked me to look at this. My first comment is that you should not reaffirm. I am a firm believer that reaffirming, even in a non-recourse state, is a big mistake. My second comment is that reaffirming is no guaranty that Chase will work with you. I believe you would be better served to simply get on the phone with the lender and work it out. Chase is not going to require a reaff. What it will require is a letter from your attorney that it is free to speak to you. In the end, if you cannot work it out, once you have your discharge you can file the 13. The second bk is not the best choice but it may be your only choice - a choice, I will add, that you do not have to make any time soon since it appears that there is no pending Trustee Sale.

Des.

[sh9730]

Des,

Thanks! That was my original train of thought - but then I started reading and thinking that since right now they are under the stay - and as you point out are not into any official FC proceedings yet, that maybe by contacting them I actually SPEED UP the FC process by getting them thinking they better apply for the MLS when maybe I wouldnt have made their radar for awhile otherwise....but I guess I still sort of feel the best approach is to KNOW what my options are, and until I contact them I wont have that information. SO, now I think once I confirm the money to at least make that first payment we agreed upon in hand (May 10th as I discussed and assuming US Bank hasnt frozen my account!! LOL see my other thread out there), I will make the initial contact.


Thanks!

[aaj67]

sh9730

Did you list the mortgage payment on B22A and on schedule J? Which amount did you list, the original or the new amount?

[sh9730]

We put the normal amount of 1200.00.

[aaj67]

Thanks for your reply..the reason I asked is because we supposed to list the actual expenses on Schedule J, I understand you didn't make a payment for 4 months. I'm basically in the same situation. So I was wondering if anyone objected for listing that payment on Schedule J and B22A.