Bankruptcy Petition and Reaffirm questions

[mack14]

What is the name of your state? Indiana

Ok, I recently retained a Bankrupcy Lawyer (large national firm) and filled out all the monthly expense sheets, income, bills etc. I am filling as well as my ex-wife (2 seperate case numbers - We are legally divorced but live together as a couple with our 2 children and have for 8+ years) I owned afew rental properties and that is what got me into this financial crisis. I sold one 7 months ago and made a 13,000 dollar profit, 90% of which went to bills (this was before I considered banckruptcy) I still have one rental but am surendering that, as I have not paid since I retained the lawyer 3 months ago (no forclosure has been made yet) I also own a used car and a used truck (car is worth 1200, truck 500) and our family car which we finance and are current on. Our personal house with two mortages are current as well. In the petition it states in one place where the car and personal house are exempt, then in another where the car and both mortages on the personal house will be reafirmed? Since we have two sets of paprerwork due to being divorced, they cotradict abit, but I assume we fix that with our meeting with the Lawyer BEFORE we sign the petitions correct? I want to keep my personal house and the car we finance as well as atleast the 500$ truck. They can have the 1200$ car and the rental. I have to get market analysis's of the house and the rental before I can meet with my Lawyer and that might take a week or so. I know there is not much equity in our personal house. It's just that term "reafirm" that scares me. What does that actually mean?

Thanks alot for any and all input

 

[djohnson]

Reaffirm basically means you pull it out of the bankruptcy. You agree to all original terms on that loan and if for any reason you default, the bankruptcy will no longer protect you from foreclosure or repo on anything reaffirmed.

Just a quick question, how much equity is in the house? How much is your second mortgage for? Why reaffirm it and not include it in the bankruptcy?

 

[mack14]

Reafirm

Well in Indiana we are allowed 7,500$ in equity. The original loan is around 42000 and the second is 30000. In this market the house is worth about 75000. So I think we are OK there. I just didn't know what reafirm really meant is why I asked. I just didn't want to get into a situation where My home loan and second mortage would have to be re-applied for, especially right after a bankruptcy, the car loan too. My lawyer just said at our intial consultaiton to reamain current on the house and car (which we have within just a week or two late due to paying for the lawyer) So I just assmumed those loans would not be affected by the bankruptcy? Is that correct? Will my banks that I have the house and car be notified of my bankruptcy? Can they decide to repo the car, or forclose on the house even though I reamin current?

 

[djohnson]

If you don't reaffirm they have those options. That is why you reaffirm. It basically takes them out of the bankruptcy and you abide by all original terms.