Illinois BK Questions

[mlopez60120]

First I like to start off by saying that this is a great site tons of information and the people are always willing to help. Sorry for all the confusion and if it appears if I asked this previously but I am getting mixed signals from my realtor and a new mortgage company.

I filed BK 2 years ago, I filed chapter 7. All debt including my mortgage was included in the BK. The BK was due to medical reason however my attorney recommended that we include all our bills including our house just in case. The way our attorney presented this to us was that in the event something happened we be protected for 7 seven years with the BK. Since the BK I have paid my house on time and never been late even after the BK always made my payments. Keep in mind the BK was not about my house it was due to medical reason and my wife not being able to work.

My questions are as follows:
I did not reaffirm on the mortgage but I have made my payments. Do I own the house or does the bank own the house? I understand until the loan is paid the bank owns it but in theory my question do I own it in the sense that I can sell it?

After some time and some thought we are planning on moving to a different state. However like lots of people I am upside down on the mortgage. We want to sell but it would have to be a short sale because we are upside down 25K and I do not have 25K to pay the bank. My questions is can I sell it and talk to the bank about a short sale? If yes should I do a Cooperative short sale or a traditional short sale?

Since the Bankruptcy I have paid the house and I have been reestablishing my credit however the bank does not report my current any good payments to the credit bureau. So my questions is if I stop paying the house can the bank report the negative of not paying? Or if I sell it as a short sale can the bank list this as a negative in my credit report even though the house is already included in the BK?

Any other information on mortgage and BK will be greatly appreciated.

Thanks

[TXskyblue]

You did not reaffirm the mortgage. This means only that the bank cannot sue you it if you walk away. It does not mean really anything else. The bank still owns the note on the house. If you pay the mortgage as you originally agreed to, you will pay it off and they will give you free and clear title to the house.

If you're way upside down on it and want to get away from it, consider stopping paying and letting them forclose. You'll get a few months I think before you have to leave. Save up for the new place.

No, they cannot report late or missing payments because your obligation to pay for the house was discharged in BK. That is why not reaffirming a house is most often the right decision.

As an aside, my mortgage (also NOT reaffirmed) only stopped reporting while my BK was pending discharge. Once discharged, they started reporting again. Same with my car. I don't know how common that is, but that's how it worked for me. If I were to stop paying either one, they could foreclose/repossess, but they legally would not be allowed to report that I stopped paying.