Reafirming house and car

[despritfreya]

Livingdream,

I am the original poster of the thread that you were directed to. As it relates to your home, the bk Code does not require you to act on your intention to keep the home by signing a reaffirmation agreement. If you remain current on the mortgage you can keep the home and all the advantages that go along with it such as building equity and taking a tax deduction for interest. The only thing you lose, as far as I can tell, is the lender potentially reporting your payments on your credit report.

However, if you take the extra step and officially reaffirm, the possibility that payments will be reported is not the only thing that can happen. Florida, if I am not mistaken DOES NOT have an anti deficiency statute. If you officially reaffirm you are re-obligating yourself to the loan. You are removing the protection of the bk discharge. If you default, the lender will foreclose and have the added benefit of a right to sue you for whatever it does not recover from the foreclosure.

You say now that you can handle the payment. That is fine. But, like the person from Michigan who prompted me to begin the thread about why reaffirming is a bad idea, you may find out the hard way that re-obligating yourself to the loan was a big mistake.

You simply need to weigh the risks and the benefits. My job, as an attny, is to try to protect my client from future risk and, even though I live in a State with an anti deficiency statue, to this day I tell my clients “do not reaffirm”, just “stay and pay”. Your attny sees things differently and that is fine. You will eventually do what you feel comfortable with.

Now, the vehicle is a different beast. The Code requires you to act on your intention as it relates to such items. Certain jurisdictions have found ways around the requirement to reaffirm, including mine. I do not know if the Judges in Florida have jumped on the “reaffirming is a no-no as long as you are current” bandwagon. If they haven’t there may be no way to protect yourself from the trap that Congress and the credit industry created.

Des.

[AngelinaCat]

Here is the thread that that keepsmiling is referring to:

http://www.bkforum.com/showthread.ph...rming+bad+idea

Please read it first before making any decisions. Also, I regret the one poster hijacking the majority of this thread. I trust that it is back on track.

Thanks

[Tater]

Livingdream,

I am the original poster of the thread that you were directed to. As it relates to your home, the bk Code does not require you to act on your intention to keep the home by signing a reaffirmation agreement. If you remain current on the mortgage you can keep the home and all the advantages that go along with it such as building equity and taking a tax deduction for interest. The only thing you lose, as far as I can tell, is the lender potentially reporting your payments on your credit report.

However, if you take the extra step and officially reaffirm, the possibility that payments will be reported is not the only thing that can happen. Florida, if I am not mistaken DOES NOT have an anti deficiency statute. If you officially reaffirm you are re-obligating yourself to the loan. You are removing the protection of the bk discharge. If you default, the lender will foreclose and have the added benefit of a right to sue you for whatever it does not recover from the foreclosure.

You say now that you can handle the payment. That is fine. But, like the person from Michigan who prompted me to begin the thread about why reaffirming is a bad idea, you may find out the hard way that re-obligating yourself to the loan was a big mistake.

You simply need to weigh the risks and the benefits. My job, as an attny, is to try to protect my client from future risk and, even though I live in a State with an anti deficiency statue, to this day I tell my clients “do not reaffirm”, just “stay and pay”. Your attny sees things differently and that is fine. You will eventually do what you feel comfortable with.

Now, the vehicle is a different beast. The Code requires you to act on your intention as it relates to such items. Certain jurisdictions have found ways around the requirement to reaffirm, including mine. I do not know if the Judges in Florida have jumped on the “reaffirming is a no-no as long as you are current” bandwagon. If they haven’t there may be no way to protect yourself from the trap that Congress and the credit industry created.

Des.

Des,

Great advice again! Our attorney is adamant about us not reaffirming our mortgage. Like you said, something could happen in the future and we would be stuck with a payment we can't afford. We have been current on our mortgage and she says that is a good thing. We have talked briefly on our own car loan and reaffirmation. I am going to bring it up more in our petition appointment. She said the only benefit to reaffirmation on a car loan is if she can get a lower interest rate. I am going to ask her if it is required in our district to reaffirm. We do have a twelve year old vehicle and we owe a good amount on. She is going to do a redemption on that so we can buy it outright for cash.

To the OP, please take the time to read the thread about not reaffirming your mortgage. I read it before we found our attorney. I was able to ask informative questions regarding this and how it pertains to our situation. She agreed with us and stated you don't want your home to own you. We don't plan on leaving our home anytime soon. If something happens in the future, like another job loss, then we aren't stuck with a mortgage payment we can't afford. Believe me, it is worth the read and the people on this forum only have your best interest at heart! Keep us updated !

[livingdream]

Well, folks.....an update. I had my court date yesterday and after feeling fairly calm about all this, I found the last few days before court I was feeling a bit nervous. But, all went well. I asked my attorney more about reafirming the house and car and she said that both had very low interest rates and the house is not upside down. Our car loan is 1.9% and the house is 4.75%. She said that if we owed more on the house than it is worth she would suggest not reafirming. But, for us she felt that reafirming was a good idea. That's what we did. She said that reafirming will mean that both those loans will be continued to be reported on my credit report (instead of saying 'discharge to bankruptcy') and it will help to rebuild my credit.
Now it's that 60 day count down!

[AngelinaCat]

Good wishes to you. We will be watching you at the Finish line.