I'm going to be filing bankruptcy but have concerns.

[Jackdog]

I want to keep my house it's all I have. I am current with payments and always pay by due date. I started a business in 04 that failed. I had to use credit cards just to keep bills and food on the table. I've been working now since 2007 but can't get ahead. I wake up every night stressed. I'm tired and can't continue like this. I know it's my fault. My problem is this. My house is in my name but I have a HELOC on it that I am just the co borrower. I don't want to include this in my Bankruptcy but if I'm just the co borrower will they view that debt as the main borrower, not mine, and try to go after my house. It's my ex husband we got the loan while still married but I have made all the payments on the house from the start of the loan. I'm waiting on attorneys to call me back. But decided to check here first. I'm in Florida, I make under 20k a year. The house has very little equity in it. I have a lot of debt over 20k. Anyone know what will happen with the house?

[DebtHater]

A co-borrower is no different then if it was all in your name so you will have to list it as a debt. The difference is that if you BK, the whole debt falls on the other individual listed on the note.

What you may be able to do is reaffirm house. If the house is reaffirmed it would be as if it wasn't included in the BK and you just continue making the payments.

[Jackdog]

Thank You. I talked with the lawyer a few minutes ago. He said the house is safe as long as I'm current on payments that I just have to reaffirm the loan. None of the debt I have is secured except the home which I plan on keeping and continue to make payments on time for. I'm still stressing out over this. I tried for years to get this debt paid off but the interest rates are so high (even though I closed the accounts) The balance doesn't seem like it's getting any lower.

[Mensa1]

Educate yourself on reaffirmations before you sign anything.
It is rarely a good idea to reaffirm ANY debt, just keep the pymts current and all is well.
That way if anything happens downstream, you are NOT liable for the loan... I know you want to and will pay it, but do so w/o reaffirming. You will be glad you did.

[DeadManCrawling]

Mensa is right. For 99% of people, it is best NOT to reaffirm.

This does NOT mean you lose the house either.

Since you are brand new to the forum, I will explain some things you may want to search for and also ask your attorney.

In short, lenders do not want your house most of the time anyway. On a secured debt like a house, the mortgage is treated separately from your BK. So, your BK resolves all debts, including the mortgage to a certain degree. But it does not wipe out the underlying mortgage lien. This sounds more complicated than it really is, though.

What it means: Keep paying the mortgage and they cannot take the house back.

BUT, if you ever hit a trouble spot and CANNOT pay the mortgage, they cannot pursue you for the loan. If you reaffirm the loan, they can come after you for the deficiency, or amount owing.

In your petition you will be asked your intent regarding the house. At that stage, you would check the box for "Reaffirm". That, in itself, is not legally binding. It is simply what you "wish" to do.

Later, if the lender even bothers to send reaffirmation papers, you simply ignore them. Nothing further can be done to you. Many lenders won't bother to send them anyway, unless prompted.

The important thing is to stay current. Trying to merely pay while in BK can be a challenge, because lenders are not supposed to collect debts during the BK "Stay". It is important to know how to get the payment to the lender for proper credit during this period. Most or all of them have special "bk departments" that accept payments during bk. They usually have different addresses than the normal payment dept. It is vital you figure this out, or you could end up falling behind because you cannot get a payment to the right person.

[Jackdog]

Ty Deadman. Should I let my mortgage company know about my filing and where I should begin to send payments? I will bring this up to my lawyer is there a way he can help me in this matter.
The thought of losing my house would be too much for me to bear. I have no family just me, my boyfriend, and our dogs no children. The thought of losing the house and losing them is more than I could ever handle.

[tigergem]

Wow. DMC! What a great explanation.

I have been totally avoiding these chapter 7/mortgage discussions because a) they don't pertain to me and b) I didn't get it. But that explanation totally made sense to me. I get it! I just love when I "get it"! Thank you!

Jackdog, I would reckon (just from what DMC said) that you would just keep making your payments as you always have. And the general advice on most of the threads around here is never ever tell a creditor that you are filing for BK.

But I am going to back out of this thread now, because I'm no expert, I don't really know... this isn't a good topic for me to be putting my 2 cents in.

But good luck to you, Jackdog! And welcome to the forum!

[Dst1]

Later, if the lender even bothers to send reaffirmation papers, you simply ignore them. Nothing further can be done to you. Many lenders won't bother to send them anyway, unless prompted.

The problem is that this just isn't true anymore. Technically, a "ride through" don't exist anymore and that is what not signing a reaffirmation is, a ride through. Nevertheless, ride throughs remains a reality and may even work for some people living in some states.

The only honest answer is that the law is a mess. I personally wouldn't advise anyone to do anything. I feel sorry for anyone owning a home in BK right now. Who the heck knows how this is all going to play out in the ensuing years. You're taking a gamble no matter what you do.

[moe]

Can you explain what you mean by a 'ride through'?

[DeadManCrawling]

Ride through is still effective in most districts.

This is why it is so important to speak with your attorney, or, if pro se, to make damn sure you know what you are doing.

Ride through is:

1. You state your wish to keep the house.

2. You do NOT sign the reaffirmation paperwork.

3. You KEEP PAYING the mortgage.

Simple as that. As DST noted above, there are some districts that have reacted differently to this idea. The cornerstone of a ride through is that that underlying mortgage debt has little to do with BK, aside from its effect on means test and expenses.

Mortgages are a separate legal matter, and treated as such in every district I am aware of.

So, you indicate you will keep the house in BK court and it is okay. As long as you keep paying.

Based on the BK, the lender may or may not send you reaffirmation paperwork. If you wish to ride through, you do not sign this. Many courts will not allow a reaffirm anyway.

As long as you keep paying, the lender cannot legally foreclose. This is the case in nearly all BK districts.

As DST points out, and as I said initially, you should make sure your attorney agrees. There are a minority of areas that can be problematic with this. Better to be safe than sorry, and that is what you pay the attorney for.

If you are pro se, you may wish to consider consulting with an attorney or three to ask this question.

[MSbklawyer]

Can you explain what you mean by a 'ride through'?

There are essentially three fully recognized ways to treat a secured debt in bankruptcy.

1. Reaffirm. Which means you sign back up for the debt in your personal capacity. Think of it as waiving your discharge with respect to the reaffirmed debt. You keep the collateral, you keep making payments and you become once again personally liable for the debt.

2. Redeem. You pay off the debt in full, all at once, and thereby 'redeem' the collateral from the creditor's security interest.

3. Surrender. You walk away from the collateral and let the lender take it. Your discharge prevents your lender from coming after you for any deficiency.

Ridethrough, which is the 4th way, can be best thought of as the ba&1ard child that came about when Mr. Reaffirm and Ms. Redeem . . . well. . . Let's just say that it has characteristics of both Reaffirm and Redeem. In essence, you redeem the property with monthly payments instead of all at once. You don't sign back up for personal liability on the debt. You just keep making the payments and you keep the collateral. It's not recognized by the code, and depending on how you read it, may even be prohibited by it. It is advantageous to the debtor because if things go sour again in the future, he has not placed himself back on the hook personally for the debt.