reffirm vs let it go

[macahs]

To the best of my knowledge - it's only considered "incl. in bk" if you actually include it in the bk.

If you are discharged and you do not file the necessary paperwork to include the mortgage in the bk - then that debt is now yours. Any point after the discharge you are extremely vulnerable to being foreclosed on (by missing a payment, etc.)- in which not only would that debt stay with you for a long time (meaning, they'll attempt to collect) - that's when it's also a double whammy on your credit (one being the bk and the other the foreclosure).

The debt you would owe would be the difference of what it sold for at auction and what your pay off was (incl. all their attorney fees, etc.). This could be tens of thousands of dollars. Kind of like a a repo of a car - they take their collateral but you still owe the debt. Hehe, this is where I was stumped regarding a foreclosure - I was thinking the debt would disappear but that's NOT the case at all. It will only disappear if you include it in your bk - so definitely something to think long and hard about.

Hopefully my explanation and take on it didn't confuse matters even worse.

LOL Macahs, you made perfect sense. This is where I get so confused. At what point is it IIB and what point is it not? Let's say we don't reaffirm but make payments. Then later lets say 1.5 years down the road end up foreclosing on it. Is it then NOT IIB? Would the foreclosure process have to happen at the same time as the BK in order to be considered 1 hit?

[SinkingFast]

LOL Macahs, you made perfect sense. This is where I get so confused. At what point is it IIB and what point is it not? Let's say we don't reaffirm but make payments. Then later lets say 1.5 years down the road end up foreclosing on it. Is it then NOT IIB? Would the foreclosure process have to happen at the same time as the BK in order to be considered 1 hit?

According the Mortgage Brokers that have posted here, if the BK and Foreclosure fall together, timewise, prospective Lenders in the future will view the 2 as one single event.

However, if you have a Foreclosure followed months or years later by BK, or visa versa, now you have 2 seperate events in your Credit History.

Say you file BK, discharge the debt for the mortgage, and "ride thru" by continuing to make payments. Then turn around and have a Foreclosure 1.5 years later. That would be 2 seperate Credit events.

If the BK and the Foreclosure occur simultaneously, now prospective Lenders in the Future will view the 2 as one single occurance.

Also, an FYI for you,.............. The Mortgage Brokers also said once you reach the 150+ days late stage on mortgage payments, prospective Lenders will also view that as a Foreclosure, whether you sell yourself or not.

[macahs]

See, my attorney made it pretty clear that if it's discharged and not included - that's a foreclosure sep. from the bk but I guess the biggest thing is being stuck with the debt.

How would creditors know it's late if they don't report to the cra's (assuming you haven't reaffirmed)?