My husband and I filed chapter 7 Pro Se on July 25th. At that time we thought it was a good idea to reaffirm our mortgage. In a nutshell, our mortgage was modified last year and approximately 200K in principle was forgiven, (not back ended). The 1st was originally 465Know down to 303K permanently, the 2nd mortgage was reduced from 92K to 29K. Payments went from approximately $3600 a month to $1899 for the first and $273 for the 2nd. Therefore, we thought it was a great deal.
My husband got laid off last November AGAIN, so we kept payments up on the 1st but got behind on the 2nd well as other bills and decided in July we couldnt do it any longer and we couldnt afford an attorney. Any way we filed and had our 341 hearing last Thursday but some documentation was missing and it had to be adjorned till 9/13. The Trustee was very nice asked us if we planned to keep the home and we said yes, then he suggested to us off the record that we should consult an attorney because there are things that can be done with the 2nd loan in chapter 13, im presuming he was speaking of loan stripping which we dont want to file chapter 13 anyway so that is not an option.
In the meantime our mortgage servicer has been dragging their feet with signing the reaffirmation agreement they say they wont do it because we are on a forebearance agreement. This agreement lowered our 1st mortgage payment to $1104.63 for a year to help us while my husband is out of work, next August the forebearance will be done and we will be back to the $1899 payment. Now for the 2nd loan they made us a settlement offer of $4000.00. So if we paid that they would settle the 2nd loan and release all claims, this would have to have been paid by August 31 (tomorrow) but we dont have that kind of money yet and I suspect paying that while still being in active bankruptcy is not a good thing. I did send the reaffirmation agreement to the mortgage servicer but they say they would not sign it until we are finished with the forbearance agreement in August of 2013. Now am i wrong or isnt that way too late? Anyway upon coming to this site and seeing overwhelmingly that we should NOT reaffirm my husband and I do not want to reaffirm now, seems like we would be crazy to do so. I see where i on the Statement of Intention we can check Other and indicate "retain and pay". My next question is do we need to notify the trustee before 9/13 that we want to change the Statement of Intention, or can we do that at the 341 hearing? I know the mortgage servicer will not sign the reaffirmation agreement, i believe they don't understand what it is since they claim they will sign it next year (2013) after the forbearance. Also, as far as the 2nd loan which we are still behind on do we wait for the discharge and make another settlement offer to the mortgage servicer and pay it?
Sorry for being so long winded, but i will say I wish we had of followed the advice of this forum sooner and NOT entertained the thought of reaffirming the mortgage. Any advice is much appreciated.
My husband got laid off last November AGAIN, so we kept payments up on the 1st but got behind on the 2nd well as other bills and decided in July we couldnt do it any longer and we couldnt afford an attorney. Any way we filed and had our 341 hearing last Thursday but some documentation was missing and it had to be adjorned till 9/13. The Trustee was very nice asked us if we planned to keep the home and we said yes, then he suggested to us off the record that we should consult an attorney because there are things that can be done with the 2nd loan in chapter 13, im presuming he was speaking of loan stripping which we dont want to file chapter 13 anyway so that is not an option.
In the meantime our mortgage servicer has been dragging their feet with signing the reaffirmation agreement they say they wont do it because we are on a forebearance agreement. This agreement lowered our 1st mortgage payment to $1104.63 for a year to help us while my husband is out of work, next August the forebearance will be done and we will be back to the $1899 payment. Now for the 2nd loan they made us a settlement offer of $4000.00. So if we paid that they would settle the 2nd loan and release all claims, this would have to have been paid by August 31 (tomorrow) but we dont have that kind of money yet and I suspect paying that while still being in active bankruptcy is not a good thing. I did send the reaffirmation agreement to the mortgage servicer but they say they would not sign it until we are finished with the forbearance agreement in August of 2013. Now am i wrong or isnt that way too late? Anyway upon coming to this site and seeing overwhelmingly that we should NOT reaffirm my husband and I do not want to reaffirm now, seems like we would be crazy to do so. I see where i on the Statement of Intention we can check Other and indicate "retain and pay". My next question is do we need to notify the trustee before 9/13 that we want to change the Statement of Intention, or can we do that at the 341 hearing? I know the mortgage servicer will not sign the reaffirmation agreement, i believe they don't understand what it is since they claim they will sign it next year (2013) after the forbearance. Also, as far as the 2nd loan which we are still behind on do we wait for the discharge and make another settlement offer to the mortgage servicer and pay it?
Sorry for being so long winded, but i will say I wish we had of followed the advice of this forum sooner and NOT entertained the thought of reaffirming the mortgage. Any advice is much appreciated.
Bankruptcy Wizard
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