Mortgage with Chapter 7

[buzzstpoint]

We're getting ready to file our paper work soon.
Our case is pretty simple. We are well below the WI median income, and it seems all our property and assets are covered by exemptions.

I'm worried about my mortgage. I'm told not reaffirm. But I'm affraid of losing my house.

I pulled out my mortgage and only one section has the work bankruptcy in it. Here's the section.
9. Protection of Lender's Interest in Property and Rights Under this Security Instrument. If (a) Borrower fails to perform the covenants and agreements contained in this Security Instrument, (b) there is a legal proceeding that might significantly affect lender's interest in the property and/or rights under this Security Instrument (such as a proceeding in bankruptcy, probate, for condemnation or forfeiture, for enforcement of a lien which may attain priority over this security Instrument or to enforce laws or regulations), or (c) Borrower has abandoned the property, then the Lender may do and pay for whatever is reasonable or appropriate to protect Lender's interest in the property, and securing and/or assessing the value of the Property, and securing and/or repairing the Property. Lender's actions can include, but are not limited to: (a) paying any sums secured by a lien which has priority over the security Instrument; (b) appearing in court; and (c) paying Reasonable Attorneys' Fees (as defined in Section 25) to protect it's interest in the Property and/or rights under this Security instrument, including its secured position in a bankruptcy proceeding. Securing the propery includes, but no limited to, entering the property to make repairs, change locks, replace or board up doors and windows, drain water pipes eliminate building or other code violations or dangerous conditions, and have utilities turned on or off. Although Lender may take action under this Section 9, Lender does not have to do so and is not under any duty or obligation to do so. It is agreed that lender incurs no liability for not taking any or all actions authorized under this Section 9.
Any Amounts disbursed by Lender under this Section 9 shall become additional debt of Borrower secured by this Security Instrument. These amounts shall bear interest at the Note rate from the date is disbursement and shall be payable, with such interest, upon notice from the lender to borrower requesting payment,
If this Security Instrument is on a leasehold, Borrower shall comply with all provisions of the Lease. If Borrower acquires fee title to the Property, the leasehold and the fee title shall not merge unless Lender agrees the merger in writing.

Can anyone interpret that?
Also along with this mortgage I have a rider with WHEDA, They want to charge us a federal recapture tax or no more than $4518.75 if I sell or give away my house within 9 years,.

How does this play into the BK? Do i list this as one of my secured creditors?

Also If I don't want to reaffirm, but stay in the home and keep paying, how to I fill out the Statement of Intentions?

[justbroke]

In many cases, the so-called ipso-facto clause for default don't apply in most States. The fact is, that in most States, you must actually be in material breech of the terms of the security instrument in order for the lender to foreclose. Material breech would be failure to pay or to maintain hazard insurance, or even not paying property taxes. In other words, solely filing for bankruptcy is not a material breach and the ipso-facto clause means nothing.

This is why you should probably get a consultation to find out if there is any standing for an ipso-facto default clause (regarding bankruptcy) in your particular State. The major lenders don't care so long as you are paying The ankle biters (credit unions, small banks, private money) may care more. However, it has to go back to the State non-bankruptcy court if those ankle biters were to start nibbling at your ankles.

Re-reading that paragraph, it looks like bankruptcy only means that they may show up in the bankruptcy court to defend their rights...

Lender's actions can include, but are not limited to: (a) paying any sums secured by a lien which has priority over the security Instrument; (b) appearing in court; and (c) paying Reasonable Attorneys' Fees (as defined in Section 25) to protect it's interest in the Property and/or rights under this Security instrument, including its secured position in a bankruptcy proceeding.

I would not worry so much. If they haven't already filed motions in the Bankruptcy, they probably aren't going to do anything.

[buzzstpoint]

We dont know if they will do anything.
We haven't filed yet, Probably will do so in the next week.

When we had our consultations with 2 lawyers they both said when you sign bring in your mortgage papers and we'll take a look at it.
Wondering if I should make an "anonymous" call to my bank (Anchor bank) and see if they will answer any questions.

[justbroke]

Never call the bank!

[buzzstpoint]

Never call the bank!

Kinda figured that.

It's odd about the reaffirm the mortgage. Everything I read says do not reaffirm.
3 lawyers I have called already have said we should reaffirm. I'm not sure if this is a Wisconsin issue?

[justbroke]

Should doesn't mean "need to" or "compelled to". I would simply ask them... "Do I have to? Am I compelled to?" There is simply no reason to reaffirm a mortgage (period). If they say you are completed to, then ask specifically what causes this? Ask them if it's the ipso-facto clause I the mortgage and the underlying state non-bankruptcy law? Or, are you just suggesting that we do?

A lawyer should be able to tell you what his/her recommendation is based on and provide you with state law or caselaw that supports the recommendation -- should you ask.