Help me with going over this one more time.. :)

[TRfromillino]

I spent most of this morning pouring over years worth of posts on here about reaffirming. And foreclosure. If I had a lawyer like Despritfreya (bless his heart, he gives so much to this forum!) I would know exactly what I needed to know, have it all explained to me in language I could understand and I'd walk into the 341 with some confidence, knowing my lawyer and I were on the same page. But that's not what I have, so I'm left to dig out the info for myself, as it pertains to me and the state of Illinois.

So I compiled a few questions down on paper to ask.

I checked reaffirm on my schedule because I had to put something down. They wouldn't let me use 'other' and I wasn't going to surrender to the bank on a house I'm current on and actually have a bit of equity in. (Some, not much) I questioned them at the time about how he could put his signature on them knowing how strapped I am and was told that if I earn enough money during the month to cover the mortgage, then he assumes no undue hardship. Is he crazy? I'm wondering how I'm going to pay for my license plate tags next month! My budget is *that* tight. If I thought the reaffirmation would be denied by the judge, I would go for it, just to be able to say I tried. But with my lawyer saying it's 'ok', the judge might not look twice before saying 'ok' too! Then I'm on the hook again.

What if the lender forces the reaffirmation? And how does that sound when they do it? I don't understand that.

How do I even know if I can say at the 341 that I've chosen not to reaffirm? How do I say it? Can you do that in Illinois?

I am comfortable with my decision not to reaffirm, just based on the fact that at almost 60 yrs old, anything can happen. I lost my husband in '03 to cancer, he was 46. There's no guarantees on anything, for anyone. What I'm not comfortable with, is that I'm not confident with walking into the 341 and not being better prepped so I appear confident. I'm unsure of my lawyer and how he will handle it if I stray from his way of doing things. I like my ducks in a row so to speak, and I desperately want things to go right.

[AngelinaCat]

I am so sorry to read of your loss of you beloved DH.

Will your attorney even attend? Many send 'stand-ins'. If you are asked about your house at the 341, say that you are current, and intend to stay that way. Do not volunteer anything else unless you are asked. If you are specifically asked if you are going to reaffirm, then say that you checked the box indicating you would reaffirm, but since then you have had 'second thoughts' and are unsure.

Again, never volunteer anything unless you are asked specifically about something.

Good luck! I wish there was something that we could do to ease your mind.

If the attorney balks at that, just tell him/her that YOU are in charge, and that the attorney is the hired hand. You paid for advice, but you have the right to take or reject that advice. If the attorney threatens to fire you as a client, so be it. Most of the work is already done, and now it is a waiting game for the 60 days to be up.

[DaisysMom]

I had to say that I wanted to reaffirm also. But then when it came time to do the paperwork, I just told my attorney that I had changed my mind. It was no big deal in my case...didn't change anything. BK was discharged and closed right when it was supposed to be. The reaffirm was never mentioned again. I am still in the same house...paying the same mortgage, like nothing even happened. That was my experience.

DM

[TRfromillino]

AngelinaCat and DaisysMom, thanks for the replies. I believe the lawyer is going to attend the 341. He isn't in a 'firm', has his own practice and I've never seen anyone else in there other than the assistant and him. He's an older man (older than me!) This may lend itself as to why he's set in his own ways. He just wants an easy case, go there and get out. I, however, have been on my own for 10 long years, work in a high stress job with behavioral kids. I know there's 2 sides to every coin and there's no such thing as easy. I'm not afraid of the 341 for the most part, especially the unsecured debt part. But I haven't gotten my head wrapped around this house thing yet. Too many unknown things, with no answers from someone I hired to give me the answers. I don't do well with 'read between the lines'. lol

One other question I forgot to ask is about the ipso facto clause. Where the bankruptcy triggers a default. Most things I've read have said it's not enforcible if I'm not behind in payments. But no one says why it's not enforcible. So....why? lol

Anywho, thanks so much to everyone for every tidbit of information that I've received! Hopefully soon, I will be able to put them all together into a complete picture!

[pamkev]

Aw Hon I feel your frustration sounds like you lawyer does want it done easy and no hassles. My lawyer said in her most matter of fact voice NOT to reaffirm home and on the paperwork she wrote stay and pay and at the 341 nothing was asked. We never did heard a word from bank that holds the note we just keep paying as usual.My lawyer told us as long as we were current our our mortgage the bank could not do anything. Now we are in Pa maybe things are different in your state. Thoughts are with you.

Pam

[tobee43]

TRfromilliono, first, i want to tell you how brave you are. i know this is a really trying time for you and to go it alone is a hard task. i'm so sorry you lost your DH to cancer, we have been fighting it now for some time, so i really understand your struggle.

let me explain a bit about your concerns, also known as an ipso facto provision or bankruptcy clause. it is a provision in an agreement which permits its termination due to the bankruptcy, insolvency or financial condition of a party. the bankruptcy code prohibits enforcement of such provisions in executory contracts and unexpired leases of the debtor (§ 365(e)(1), bankruptcy code).

let me do this. to hopefully help you understand it a bit better.


"Contracts and leases typically contain a provision, called an “ipso facto clause,” which states that the filing of a bankruptcy case or the occurrence of another listed event is a default entitling the other party to terminate the agreement and to begin exercising remedies. The term “ipso facto” comes from the Latin phrase meaning “by the fact itself.” Thus, the filing of the bankruptcy or other action itself triggers the default. Some ipso facto clauses require notice first; others are automatic.

A. Triggers for Ipso Facto Clauses

Typical ipso facto clauses are based on the following events:

Filing of a voluntary bankruptcy petition

Having an involuntary bankruptcy filed against a party (sometimes, if the petition is not set aside within a set number of days)

Insolvency or financial condition

Admitting in writing that a party is insolvent

The making of an assignment for the benefit of creditors or the appointment of a receiver for all or a substantial portion of a party’s assets.

B. Ipso Facto Clauses Are Generally Not Enforceable in Bankruptcy Cases

Section 541 of the Bankruptcy Code sets forth what interests in property become property of the bankruptcy estate. Section 541(c) provides that property interests of the debtor become property of the bankruptcy estate notwithstanding a provision in an agreement that requires forfeiture of the interest based on the insolvency or financial condition of the debtor, the commencement of the case, or the appointment of a custodian before the commencement of the case.
Section 365(e)(1) of the Bankruptcy Code expressly invalidates ipso facto clauses that might otherwise result in forfeiture of an executory contract or an unexpired lease. Section 365(e)(2) of the Bankruptcy Code provides that the invalidation of ipso facto clauses does not apply to contracts that are non-assignable under applicable non-bankruptcy law or to contracts to make a loan or extend financial accommodations or debt financing to or for the benefit of the debtor.

Provisions in unexpired leases for real property containing ipso facto clauses would be invalided as to a debtor under the Bankruptcy Code. Section 365(f) of the Bankruptcy Code states that notwithstanding language in an executory contract or lease to the contrary, the trustee (or debtor-in-possession) may assume a contract or lease provided the trustee (or debtor-in-possession) furnishes adequate assurances of future performance and cures all defaults as required under §365(b) of the Bankruptcy Code.

C. Why Put Ipso Facto Clauses in Agreements?

Ipso facto clauses typically are only unenforceable in a bankruptcy. If the party never files a bankruptcy, then the clause may be enforceable. However, if a later bankruptcy is filed, an insolvency-based termination made prior to the bankruptcy may not be enforceable in the later bankruptcy case.

Further, an ipso facto clause may trigger a default under a guaranty of a non-bankrupt guarantor or liability of a co-debtor that does not file a bankruptcy petition.

Although an ipso facto clause may not be enforceable in bankruptcy, these clauses are commonplace and will not prejudice the landlord. If a commercial tenant is a debtor in a bankruptcy case, it is required under §365(d)(4) of the Bankruptcy Code to assume the lease (which means the debtor will need to cure defaults and provide adequate assurances of future performance) within the earlier of 120 days from the commencement of the case, or the entry of the order confirming the plan. Without the landlord’s consent, at most the bankruptcy court can extend this period for 90 days for cause. If the lease is either rejected by the trustee (or debtor-in-possession) or not assumed in these time periods, the lease is considered to be rejected and the debtor is required to immediately surrender the property to the landlord. Accordingly, notwithstanding the unenforceability of ipso facto clauses in commercial real property leases, a commercial land."

also for the 341, bring a friend! have a 341 party day LOL! don't feel nervous, it will go perfect.

[TRfromillino]

Good readine Tobee! Will the fact that I'm not reaffirming the mortgage make the ipso facto become more viable, as in they will file for relief of stay and commence on foreclosure even if I'm current? Honestly, I just don't see my little small town bank doing that, I know them and they know me. I often think that if I don't reaffirm and the case is discharged, that the bank president (who I've known since he was little) would stop by the house for a little discussion as to what plans I had. lol But they have a lawyer too, and he may say they need to do something different.

[tobee43]

i don't either, if you are current with your mortgage and intend to stay in your home, you really should be fine. reaffirming as we know is usually a very bad idea, as it closes the door for a future walk if one needs to at a later date. however, in your case, where you do not intend to leave and have some equity in the home, i don't think you have anything to be concerned about. just continue to pay and stay, and if the bank comes to you at a later time asking you to sign a document that you feel is in your best interest it certainly is something to be considered.

[keepsmiling]

TR.... let me ease your mind a bit also.
Could be, your Olde Tyme attorney still lives in the days of the housing bubble, when PERHAPS banks were eager to regain/resell properties and make piles of easy cash.
In today's bust, they generally do NOT want to be saddled with any more surrendered/foreclosed homes. Hence all the foot dragging on foreclosures.
Generally speaking, they are DELIGHTED to have you stay and pay.
So... stop worrying (easier said than done, I know) and try to go with the flow. I'm sorry you are stuck with this guy, but it's all gonna be ok.
Imagine all of us holding your hand thru the 341.

[TRfromillino]

I will do just that, keepsmiling, imagine ya'll holding my hand and God's hand on my shoulder. Goodness knows it's not going to be the lawyers! lol

Just a little off topic, but I saw somewhere on here about how you can check how many people are scheduled for their 341's that day on Pacer. For the life of me I can't find it again! Anyone know? I'd like to look!

[btbeme]

Just a little off topic, but I saw somewhere on here about how you can check how many people are scheduled for their 341's that day on Pacer. For the life of me I can't find it again! Anyone know? I'd like to look!

That isn't on PACER - that info is usually posted on your county's website. Do a Google search for US Bankruptcy Courts for your county - there is usually a link to a 341 calendar there.

[TRfromillino]

Well, it took forever to find, but I finally did. Looks like they have groups of 4-5, mine being the 3rd group. So maybe if I go early, I can get a feel for it.

[AngelinaCat]

If you can get there an hour or so ahead of time, that will give you a 'feel' for your trustee. Just don't make your early period fall on their lunch hour. We were an hour early to our 341, and we got to spend that hour watching the four walls of the meeting room!

[tobee43]

it's good to sit for a few so you can see what to expect.

when we went we were the first one's to go. it didn't take long and we were surprised we were first. i knew what to expect, but we still had something come up that we thought was taken care of. what we found out later was the trustee was just putting the information on the "record". our trustee was really nice and we had already been in contact with her office. actually, most questions about our case were emailed to us via our atty by the trustee and i answered and sent the information myself prior to our 341. so it was really a slam dunk.

[pamkev]

We followed the advice on this forum and were 2 hours early for ours. We got the feel of it most went well although the poor lady that was before us had not a clue and neither did her lawyer. The TT said to go back and review things and pointed such items out to her lawyer. I wonder if she even went back and if so how it went.

Pam