ProSe Chap 7 filed Feb 2005 Questions

[Neo28344]

OK, I have a serious question needing clarification ASAP.
I live in Illinois, purchased my home in Feb. 2001
I have a previous loan modification to avoid foreclosure in 2003
My finances due to job loss back then inpacted my credit also.
The main reason for not filing BK in 2003 was the mortgage/foreclosure.
My mortgage Co. said starting chapter 7 during a foreclosure process meant loss of house and no loan modification.
Everything was fine after loan modification, until 2005.
In Feb of 2005 I filed chapter 7 ProSe, and discharged debts in June 2005.
I reaffirmed the mortgage, assuming it was reaffirmed.
The mortgage was not listed on my list of creditors to be discharged.
I have not looked at my credit report since b4 the BK until today.
It shows 0 balance as of Feb 2005

HERE IS MY PROBLEM

On Oct 13th 2005 I suffered an injury, and have been on LTD since.
My mortgage payments are now late since December 2005, and I have been served new foreclosure papers in May 2006. My first hearing date is next week.
Having filed ProSe, and sending the reaffirmation agreement in myself.
I have no idea what was done, I was not worried about it.
I assumed the court did not discharge without things in order.
Now, I am unsure.
The bank stopped reporting my credit in Feb 2005, showing 0 balance

I qualify for normal FHA loan modification with my LTD insurance income.
The medical expenses and income hit is/was my hardship.
I have started that process with them, and heard nothing back yet.

How will the discharged chapter 7 effect my loan modification?
PLEASE someone in the know help answer this concern.
Worried due to my credit report showing my account closed on my June 05discharge date.
My mortgage payments we made until November 2005, I just never looked at my credit report.

Thanks for the help......

[krobin02]

The first question that needs to be answered is did you have to go in fromt of a judge for your reaffirmaiton? Because you filed pro-se there had to have been a meeting with a judge about it. Judges have to ok reaffirmations by people who file pro se or else they are not in effect.

[SinkingFast]

Sounds like you need to pay a little visit to the Court House and take a look at your BK file. If you did indeed file the Reaffirmation Agreement properly, it will be on file at the Court House.

Just because you did not list the Mortgage Lender in your Creditor Matrix does not mean they did not get notified by the Court of your BK. When you file BK, you have to list everyone you owe a debt to whether you intend to discharge the debt or not.

You should have attended a Reaffirmation Hearing at the time during your BK process as well. The Judge or Trustee would have acted on your behalf since you were filing Pro Se. They would advise you of your rights, duties, and obligations associated with the Reaffirmation. They would want to make sure you knew what you were doing and you were signing the Agreement in good faith without being pressured by an outside source. The Reaffirmation Agreement would then have been accepted by the Court and entered into your file at the Court House.

If there is no Reaffirmation Agreement on file at the Court House, then it was not properly filed and recorded. That means the loan was not Reaffirmed and was discharged along with your other debt in the BK. If that is indeed the case, you have no further duty or obligation to the loan. You can simply walk away from the house if you choose.

The reason the Lender kept accepting your payments is because,.......... Under BK Law, if you do not reaffirm a debt, the terms of the original contract continue to apply. Your monthly payment stays the same, interest rate stays the same, pay off date is the same, etc.

What rights you have regarding your Loan Modification, I don't know. You may not be able to stop the Foreclosure from proceeding. Might be best to Consult with an attny to see exactly where you stand.

[Neo28344]

OK,
I prepared the complete set of forms myself in Feb 05.
I filed them myself at the federal courthouse.
I attended one meeting of creditors, where the trustee attended April 05.
No creditors attended or sent any letters in objecting.
The court discharged all debt listed in June 05.
At that meeting, the trustee told me,
send the affirmation agreement to mortgage company, and I did.
He explained that the affirmation agreement had the power to change the terms of the mortgage, which I was not doing at the time. It was those new changes to the terms of the mortgage the court and the mortgage company both had to approve. Since there was no change requested, it was senseless.

There was no judge approval, nor meeting, etc..

I guess the affirmation agreement never got returned and completed.

Therefore, NO I have no affirmation agreement filed.

Is that good or bad for my situation, asking for an FHA loan modification???

[SinkingFast]

If you did not Reaffirm, there is no loan to modify.

The Lender HAS to go thru the Foreclosure. Right now, your name is on the Deed so the Lender cannot do anything with the property. The Lender has to Foreclose, or you have to sign a Deed in Lieu. Then they can get the property into their name so they can sell it. As long as your name is on the Deed, the Lender cannot sell the property.

Had you maintained your payments in a timely manner, you would have remained in good standing under the terms of the original agreement. Now that you've missed payments, and the debt was discharged already anyway, the Lender is pretty much free to do whatever they want to do.

There are a couple of things you can try. Contact the Lender directly yourself. Discuss the situation with them and see if they will work with you. I wouldn't get too excited about that prospect because many times your Lender is simply a Loan Servicer fulfilling their duties to the investor. If the Lender is just a Loan Servicer, then their hands are pretty much tied by their agreement with the investor backing your loan.

Since you know you have an FHA Loan, you can try contacting FHA to see if they can help. Sometimes people can appeal directly to the investor with positive results. The investor has the power to stop the Loan Servicer dead in their tracks.

Also, there are Mortgage Negotiators out there. You might find one of them to help you. Most Negotiators used to work in the Mortgage Industry. They know the ins and outs of how Lenders and investors work. What they can and cannot do.

Until you can reach an agreement with the Loan Servicer or the Investor, there's nothing to be done about the Loan Modification. If you cannot stop the Foreclosure, you're going to loose you house.

[Neo28344]

Since the judge never saw my affirmation agreement, can I resubmit it now?
And put it through the system?

And shouldn't I be doing that anyway?
And also having it on my credit report, which it isnt.

This has to be the lowest point of my life,
Thanks for advice.

[SinkingFast]

Once you're discharged and closed, you case is officially done. Any Creditors you forgot to include cannot be added. And your reaffirmation period expired either right at or shortly after discharge.

Unfortunately with BK, there's no "Do Overs" once you're discharged and closed. Your case is done at that point.

[Neo28344]

Thanks for your advice boop

Here is why I ask

There were included in my papers.
I reaffirmed them, Clearly in my documents as reaffirmed debt.
Also equity as an asset, And payments as an expense.
The affirmation agreement was sent to my mortgage company.
And the homestead exemption was used to protect the equity.

New to the process I assumed they sent the agreement to the court.

And, debt discharged yes, closed I have no idea yet

I also thought the judge involvment requirement protected me from mistake.

[SinkingFast]

Thanks for your advice boop

Here is why I ask

There were included in my papers.
I reaffirmed them, Clearly in my documents as reaffirmed debt.
Also equity as an asset, And payments as an expense.
The affirmation agreement was sent to my mortgage company.
And the homestead exemption was used to protect the equity.

New to the process I assumed they sent the agreement to the court.

And, debt discharged yes, closed I have no idea yet

I also thought the judge involvment requirement protected me from mistake.

Clearly in my documents as reaffirmed debt. Do you mean that a statement of intent to reaffirm is noted in your BK docs?

The affirmation agreement was sent to my mortgage company. Did you sign the reaffirmation agreement and then send it off to the Lender expecting them to sign and send it on to the Court?

Just because you listed an intent to reaffirm,......... And just because you signed the actual agreement and sent it to your Lender,.......... Does not mean the Reaffirmation became a part of the official record in your BK case.

This has happened to others who've posted in the past here on the Forum. They tell the Court they intend to reaffirm a debt. Sign the agreement. Mail it off to the Lender only to have the Lender screw up. Either the agreement does not get signed at all. Or the agreement is returned to the Court by the Lender too late.

Other folks have been like you. They don't start checking their Credit Reports right away to fix reporting errors. Then a year or so down the road, they learn that their mortgage or car loan they thought had been reaffirmed, indeed was not.

Probably, if you take a closer look at the statements the Mortgage Lender has been sending you since your BK, you'll note they are not bills at all. If the Lender sent you a bill for a debt that had been discharged in BK, they'd be breaking the law. Probably somewhere on your statements is a note to the effect saying, "This statement is for informational purposes only. This is not a bill." Many Lenders do that. Continue to send statements with a similar sort of note printed on the statement. That way you have current info regarding your loan and the Lender doesn't break the law.

You should be able to check the complete status of your case by looking on PACER. Here's a link to a thread that will explain what PACER is and has a link to the PACER website.

http://www.bankruptcyforum.com/t1011-what-is-pacer.html