Can you "Reaffirm Investment Property"

[BlueBayou]

I have been reading regarding investment properties and do not see much info in the way of "Reaffirming an Investment Property".

Someone else posted this question and I would also like to know as well.

Anyone have input, please post---------

"Leased", "Rented" or "Vacant"

[HHM]

Well, there really is no point in reaffirming, Just keep making the payments and you can keep the property.

When you take out a secured loan, you create two types of liability.
1. Security Interest: this gives the lender the right to foreclose if you do not make your scheduled payments.
2. Your Personal Responsibility for the debt. This is your promise to pay the debt, in full, regardless of the value of the collateral. This is why lenders can come after you for a deficiency.

A bankruptcy discharges your Personal Responsibility, but it does not eliminate the security interest. Thus, to keep the property, just keep making the payments. A reaffirmation agreement resurrects your personal responsibility on the loan, 9 times out of 10, that is a bad idea.

But, as to your question, can you reaffirm investment property, sure; will a judge sign off, probably not. In order to reaffirm, you must demonstrate to the court that the reaffirmation agreement will not create a hardship.

[justbroke]

I don't see any Judge these days signing a reaffirmation on an investment property. Especially if the property is underwater or you've had trouble with rents. In general, many Judges don't like approving reaffirmations for much of anything, especially when underlying State law allows you to keep the property so long as you are current on payments.

There's not much information because a bankruptcy is a perfect time to shed debt. I would venture to guess that if the investment property were worth anything, the Trustee would have liquidated it to recover money for the Estate. To me, this means that the overwhelming majority of the time, the investment properties aren't worth anything and/or are underwater. I don't see any Judge granting a reaffirmation on that.