Georgia Chap 7--reaffirm car and house or not?? CONFUSION.

[catlfuzzy]

I also have Wells Fargo and I am at about break-even on the mortgage note. My attorney strongly advised that I do not do a re-affirmation.

I "interviewed" 4 attorneys before deciding which to sign with...and I got different answers and "vibes" about reaffirming each time. Seems to be differing opinions on it amongst attorneys.

1. "We can do whatever you want"
2. "There is NO need to reaffirm..we recommend against it"
3. "its our policy that we counsel you that you MUST reaffirm if you wish to keep it...today we are seeing some aggression on the side of banks...doing some things even when people are current....never trust banks to make good sense..and with the new bankruptcy laws we are seeing this happen more and more" (this approach really scared me...obviously I don't want to lose the house). ~~this was the "son" assistant of the attorney, he seemed a little nervous and was being overly cautious in what he was saying, perhaps).
4. and a "you can not reaffirm but know that if you go to sell or refinance it may take more work or effort as its a bit cloudy; and payment won't show on your credit report (I knew that) ".

I decided not to reaffirm. mainly because of the economy and job futures.

[LadyInTheRed]

As far as item 3 is concerned, it would be interesting to know what the attorney would tell you. If the answer is the same, I'd ask how many times he's heard of a bank foreclosing on a mortgage when paments are current. (I realize it's moot now that you've already made your decision).

Item 4 is odd to me. There is no cloud on title because of a bankruptcy discharge. Nothing new will be recorded against the property. As long as there is no foreclosure and the BK trustee does not liquidate the property, you still own the house to the same extent you did before you filed. The lender has a lien on the property. If you sell or refinance, a "payoff demand" is sent to the lender who replies with the amount necessary to pay off the lien. The lender is then paid from escrow after having submitted a signed release of lien. There could be a dispute about what is actually due, and the lender may add fees because of the BK (I don't know whether that's allowed). But, if there is any cloud on title, it's not because of the BK discharge. Yes, it may take more effort to actually qualify for a loan to refinance, but that's because you have a BK on your record, not because there's a cloud on title.

[catlfuzzy]

The #4 was who I went with, btw. (it was the clerical person, btw, not attorney who said that . I had previously met attorney who I liked). He also said if "I was going to refinance or sell it would be best to wait 3, 4 years..and sometimes the lenders will make you reaffirm at that point to move forward in the sell or refinance" (??).

Anyway, I'm excited to get this over and done with!

As far as item 3 is concerned, it would be interesting to know what the attorney would tell you. If the answer is the same, I'd ask how many times he's heard of a bank foreclosing on a mortgage when paments are current. (I realize it's moot now that you've already made your decision).

Item 4 is odd to me. There is no cloud on title because of a bankruptcy discharge. Nothing new will be recorded against the property. As long as there is no foreclosure and the BK trustee does not liquidate the property, you still own the house to the same extent you did before you filed. The lender has a lien on the property. If you sell or refinance, a "payoff demand" is sent to the lender who replies with the amount necessary to pay off the lien. The lender is then paid from escrow after having submitted a signed release of lien. There could be a dispute about what is actually due, and the lender may add fees because of the BK (I don't know whether that's allowed). But, if there is any cloud on title, it's not because of the BK discharge. Yes, it may take more effort to actually qualify for a loan to refinance, but that's because you have a BK on your record, not because there's a cloud on title.

[Pizza]

3. "its our policy that we counsel you that you MUST reaffirm if you wish to keep it...today we are seeing some aggression on the side of banks...doing some things even when people are current....never trust banks to make good sense..and with the new bankruptcy laws we are seeing this happen more and more" (this approach really scared me...obviously I don't want to lose the house). ~~this was the "son" assistant of the attorney, he seemed a little nervous and was being overly cautious in what he was saying, perhaps).

Removing you from the house and reselling it would cost them money. Banks aren't in the business of spending money to lose money. You are 50k upside down and current on payments. As long as you're paying, you're their cash cow. It would make zero money sense to go through the expense of foreclosing, removing you, then letting the house sit vacant pending a sell, presumably to someone who would demand a purchase at market value ($50k less).

As emotional as you may be about the house, Wells Fargo is only concerned about making money hand over fist, and if you're still paying, they are doing just that.

[billjacobs]

best wishes!

[catlfuzzy]

best wishes!

Thank you for that. They're hitting the button on Monday.