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reaffirming mortgage in TX

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    #1

    reaffirming mortgage in TX

    I am planning my BK Chp 7 right now and I plan on reaffirming my mortgage due to the equity in the property. I've read all the don'ts about it but it seems like in my situation it is probably better because if things go South for some unforseen reason I can always just sell, payoff the mortgage and have a nice chunk of cash in my pocket.

    good reason right?

    anywho.. my main question regarding this is current payment status.. in order to reaffirm do I have to be current on the mortgage or if I missed a couple payments would the reaffirmation just basically state I start making the same payments starting at that date and the two missed payments go away or tacked on to the end of the mortgage or what? I basically need to try to prepare myself for whether or not I will need to come up with two payments or not thanks
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    #2
    Unless you have an awful lot of equity, I wouldn't reaffirm. Even with significant equity, I might not. You don't know what the future holds. Reaffirmation benefits the creditor, not the debtor.

    Whether you have to bring the mortgage current in order to reaffirm depends on what the lender will agree to. It is generally recommended to get your mortgage payments caught up before or soon after filing a Chap 7. Once you loose the protection of the automatic stay, the lender can foreclose. I used to work for a creditor's attorney. It was the policy of one large bank to always file a petition for relief from automatic stay in a Chap 7 if the mortgage was delinquent.

    Have you consulted with any bankruptcy attorneys? If not, make appointments to consult with at least 3. Most provide consultations for free.
    LadyInTheRed is in the black!
    Filed Chap 13 April 2010. Discharged May 2015.
    $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

    Comment

      #3
      There is no reason to ever reaffirm a mortgage. Equity... is not a reason to reaffirm. Credit reporting... is not a reason to reaffirm. Helping your credit score... is not a reason to reaffirm. You'll never lose your job... is not a reason to reaffirm. You have good income... is not a reason to reaffirm.

      Just as nothing repeats itself here at BKForum, you must look at this from an individual standpoint. I have not found one single case where I would tell someone to reaffirm their mortgage. So much so, that one of our resident attorney members, opined and wrote a thread on Why reaffirming a mortgage is a very, very bad idea.

      Let me repeat myself, there is no reason to ever reaffirm a mortgage.
      Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
      Status: (Auto) Discharged and Closed! 5/10
      Visit My BKForum Blog: justbroke's Blog

      Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

      Comment

        #4
        Originally posted by justbroke View Post
        There is no reason to ever reaffirm a mortgage. Equity... is not a reason to reaffirm. Credit reporting... is not a reason to reaffirm. Helping your credit score... is not a reason to reaffirm. You'll never lose your job... is not a reason to reaffirm. You have good income... is not a reason to reaffirm.
        Let me repeat myself, there is no reason to ever reaffirm a mortgage.

        so you are pretty much saying its not a good idea to reaffirm the mortgage? LOL

        if I don't sign the reaffirm pages and just continue making payments (I assume I would need to get it caught up to current?) if I decide to sell the house in a year can I and would there be any issues at that time?

        Comment

          #5
          As long as you can pay off the existing liens, there will be no barriers to selling the home. Reaffirming or not reaffirming doesn't change that.
          LadyInTheRed is in the black!
          Filed Chap 13 April 2010. Discharged May 2015.
          $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

          Comment

            #6
            Originally posted by Dis0314 View Post
            if I don't sign the reaffirm pages and just continue making payments (I assume I would need to get it caught up to current?) if I decide to sell the house in a year can I and would there be any issues at that time?
            There is the pearl in the oyster, you are not current. This is not going to help you especially if you reaffirm your mortgage! The fact that you are in arrears (not current) is a red flag for me. I would never reaffirm under any situation and certainly not at a point where I am already in arrears.

            I would review your desire to reaffirm with your attorney. Many judges in Texas reject reaffirmation agreements as not being in the best interest of debtors!
            Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
            Status: (Auto) Discharged and Closed! 5/10
            Visit My BKForum Blog: justbroke's Blog

            Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

            Comment

              #7
              I had significant equity in my house and I did not reaffirm. No benefit in doing so.

              My loan even continues to report on my credit report each month, although that seems to be a rarity from what I've seen on this board.
              Chapter 7, above median, no asset. Discharged with no UST involvement.

              Comment

                #8
                Originally posted by TXskyblue View Post
                I had significant equity in my house and I did not reaffirm. No benefit in doing so.

                My loan even continues to report on my credit report each month, although that seems to be a rarity from what I've seen on this board.
                thanks for the reply my TX friend

                I will talk to my attorney about doing this. We haven't discuss it at all so I'm not sure which way he goes with this.. from the sounds of it though it makes no sense at all to reaffirm.. ever...

                Comment

                  #9
                  Reaffirm home??? No, its obvious you cannot afford it, period....I see in another thread you are thinking of reaffirming your $65K vehicle as well??? No, you cannot afford it, period....bankruptcy will take some sacrifice and lifestyle adjustment.....have you read this forum?

                  It is never so simple as "I have a lot of equity so if things go south I will just sell and pocket a boat load of cash"....you need a serious reality check I am afraid but start with this forum and start reading everything here....

                  Comment

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