Reaffirmation.. bank dragging feet.

[Layla55]

Lawyer is trying to get the agreement together. I have a modest house that is close to being payed off. Of course I want to get this done before discharge. What happens if the bank is not timely enough to get this done? Probably extension which upsets me. What if I don’t get the agreement? Can you sell your house? Do you still owe them debt that’s technically discharged? I’m worried! Why would they be difficult about this? Any advantage on their part?

[Layla55]

Got a call today from attorney, the agreement is ready to sign. Good! Hopefully no discharge hang ups.

[womanonfire]

I thought that you aren't suppose to reaffirm and that no decent attorney should suggest such?

[Layla55]

Depends... if you owe a lot on the mortgage or if it’s not worth as much as you owe. Then it’s good to be in the position to walk away from the debt if you need to. I don’t owe much on my house. I’m not walking away from my house , I’d sell first. So it makes more sense to reaffirm for me.

[justbroke]

There is no reason to reaffirm any debt unless it's a requirement by the lender. But, in many States, you must be careful about listing "surrender" on your statement of intentions. In some districts you must reaffirm, surrender or redeem and there is no ride through. Typically, though, it's up to the creditor to force the debtor to choose one of the three... but many debtors (through their attorneys) will put "pay and stay" for mortgages or "ride-through" for vehicles.

Smaller banks and some notorious vehicle lenders (Ford Motor Credit, as an example), will not allow a ride-through and will fight. For mortgages, smaller banks and credit unions will also fight. If a foreclosure situation comes up, some banks will revisit your forms to see if they can go back to the court to enforce your "surrender" of the property.

So it can be strategic or required. In Florida, at least, you also need to be careful in Chapter 7s where the Trustee may take your surrender, and then try to sell the property.

[Layla55]

That’s right JB.. my auto lender required reaffirmation, I couldn’t have done better with any other auto deal. I would have not reaffirmed. Mine had low miles , low interest, and is half paid for.