Well, this is confusing - reaffirm or surrender?

[NewPage]

Today when going over my petition with the legal ass't, I mentioned to her again that I do not want to reaffirm the house. She said did I want to surrender, then? I and said no no no, I just want to keep paying and stay in the house. She said I could do one of 3 things:

1) Reaffirm
2) Surrender -- although according to her this doesn't mean giving up the property
3) "Take (my) chances" -- retain & pay/stay current.

She said it's not an official choice to do #3, but that's what we put down there until I can talk to my attorney, with the understanding that I can amend the petition if we decide on something different.($26, I know)

How can she say surrendering is an option, when my husband (on the loan/title) is not filing and has no intention of surrendering anything? We were both confused. My attorney was in 341s all day so I haven't had the chance to talk to him yet.

Any idea what surrendering would mean, if not just that -- surrendering the property?

[debee]

Before BAPCPA, half the circuits in the country let debtors just write "retain and pay" on their petition for secured property that they wanted to keep. It was called the "fourth option".

Once BAPCPA was enacted, courts from one end of the country to the other interpreted the changes alike and that meant the fourth option as it relates to personal property was eliminated.

Real property is a different story. There have only been a handful of cases so far. One circuit has ruled that real property and personal property are to be treated the same and the debtor must reaffirm, redeem or surrender when it comes to both. In this circuit, if the creditor wants a reaffirmation, the court will require the debtor to either reaffirm or surrender.

But courts in two other circuits have decided differently. These other courts have determined that when it comes to real property, debtors are not required to reaffirm, redeem or surrender. If the creditor doesn't like it, too bad. The debtor can keep their real property so long as they do not default.

The matter has yet to be litigated in all the circuits. There is old law in each that is still good law (albeit law that does not specifically address the changes enacted with BAPCPA) either allowing or forbidding 'keep and pay'.

I mention this because there is a pattern when it comes to the way the courts have been ruling. Those courts which were "retain and pay" friendly prior to BAPCPA are the same ones that have allowed 'retain and pay' for real property and have found ways to allow "back door ride-through" post-BAPCPA. Those courts that did not allow "ride through" prior to BAPCPA have not allowed back-door "retain and pay" and they have not allowed 'ride thru' for real property either.

You are in a "retain and pay" friendly circuit. The paralegal that is handling your paperwork is telling you that on the Statement of Intentions you take a risk by writing in "keep and pay". The risk is that the creditor may object and insist on a reaffirmation and then you will end up in court over it. At some point someone will end up being the test case.

You also have the option of checking off "reaffirm" on the SOI and then not signing a reaffirmation agreement if the lender sends one. The risk is the same. If the lender wants to kick up a fuss and insist that you perform your intention, the same thing happens: you end up in court and the judge will decide whether you have to reaffirm in order to keep the house.

Either way, if this scenario plays out you don't lose the house. There is always a second opportunity to reaffirm beyond the one that exists at the moment of filing.

Personally, I believe that when this matter is decided in the 9th circuit, reaffirmations won't be required on real property.

[SunshineGal]

Since your husband is on the loan your risk of actually losing the house is slim to none as long as the payments are made as agreed. If it were me, I would not reaffirm unless you had a ton of equity and you're sure you could sell it for what you owe on it if something drastic was to happen.