Since my CH7 BK in 2008, I have recently checked my credit. I have discovered an odd mistake. I reaffirmed on my primary residence (1st and 2nd mortgages) which I now see was a mistake as I am now $220k in the hole. However, the 1st mortgage shows as $0 / closed and only the 2nd mortgage is displayed as active and reaffirmed. The 1st mortgage on all three credit reporting agencies shows “discharged through chapter 7 bankruptcy”. I dug further and have discovered the 1st mortgage reaffirmation paper work is missing from my file and may never have been submitted. Basically, my credit indicates that I am only responsible for a small 2nd mortgage.
I have remained in the home this long believing I was stuck paying an outrageous mortgage on a worthless property. The 1st mortgage has not pursued foreclosure and the paystubs I receive each have a message at the top stating “Our records indicate that in the past you received a discharge of this debt in a bankruptcy case. Section 524 of the bankruptcy code tells us the discharge of this debt means you have no personal obligation to repay it. The discharge protects you from any efforts by anyone to collect this discharged debt as personal liability of the debtor. You cannot be pressured to repay this debt.”
I continued paying on the loan due to my belief that I had to as a result of the reaffirmation agreement. I now believe this document does not exist through some error, probably on the part of my lawyer as he was a bit absentminded in retrospect. I only have the signed reaffirmation for the 2nd mortgage in my possession. I have checked all court documents on PACER, an on-line court document search engine. PACER does not display a signed document for the 1st mortgage reaffirmation.
Can I walk from the property without consequence? Can I obtain a new loan and position myself in a new lower priced home? Again, I show no credit report for the 1st mortgage as the balance is $0. I understand I may have to pay off the small second to avoid another foreclosure. But I would happily pay the small loan to walk from the 1st mortgage.
Any comments or suggestions are welcomed.
I have remained in the home this long believing I was stuck paying an outrageous mortgage on a worthless property. The 1st mortgage has not pursued foreclosure and the paystubs I receive each have a message at the top stating “Our records indicate that in the past you received a discharge of this debt in a bankruptcy case. Section 524 of the bankruptcy code tells us the discharge of this debt means you have no personal obligation to repay it. The discharge protects you from any efforts by anyone to collect this discharged debt as personal liability of the debtor. You cannot be pressured to repay this debt.”
I continued paying on the loan due to my belief that I had to as a result of the reaffirmation agreement. I now believe this document does not exist through some error, probably on the part of my lawyer as he was a bit absentminded in retrospect. I only have the signed reaffirmation for the 2nd mortgage in my possession. I have checked all court documents on PACER, an on-line court document search engine. PACER does not display a signed document for the 1st mortgage reaffirmation.
Can I walk from the property without consequence? Can I obtain a new loan and position myself in a new lower priced home? Again, I show no credit report for the 1st mortgage as the balance is $0. I understand I may have to pay off the small second to avoid another foreclosure. But I would happily pay the small loan to walk from the 1st mortgage.
Any comments or suggestions are welcomed.
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