Question

[Nikki74]

What is the name of your state? Missouri

I am filing ch 7 and reaffirming my home mortgage. Can anyone explain what exactly reaffirmation means? I'm confused?!?! I had our attornies assistant on the phone today and forgot to ask her and now it will be monday before I can call them, but I really don't want to bother them again. Thanks.

 

[seniorjudge]

I am NOT a bankruptcy attorney; but if I am not mistaken, that means you will be paying the debt.

 

[bigun]

If you reaffirm, it means you accept all liability for the debt. If at some point post bk you can't pay, the lender can foreclose and you will be responsible for any deficiency balance.
If you don't reaffirm but keep paying, you can walk away without paying any deficiency.

 

[quest42]

Reaffirmation agreement ::

An agreement that reinstates a previous debt after bankruptcy proceedings are completed.


http://www.investordictionary.com/definition/reaffirmation+agreement.aspx

 

[Nikki74]

If you reaffirm, it means you accept all liability for the debt. If at some point post bk you can't pay, the lender can foreclose and you will be responsible for any deficiency balance.
If you don't reaffirm but keep paying, you can walk away without paying any deficiency.

Our attorney asked us if we wanted to keep the house and then when I read the paper work we signed it said she was charging us $50 for reaffirmation fees on the Home Mortgage. So, why wouldn't we just continue paying on it? I don't understand why someone would want to reaffirm unless the mortgage company doesn't trust us to pay since we are filing BK.

 

[quest42]

Seerms like if you just keep paying it may be better. If you keep payments current, they cannot forclose, can they? If you reaffirm, it seems like you will be liable for any deficiency if they forclose and sell for less than you owe... So, why would anyone ever want to reaffirm a mortgage if there could ever be a deficiency judgement???

 

[Nikki74]

Seerms like if you just keep paying it may be better. If you keep payments current, they cannot forclose, can they? If you reaffirm, it seems like you will be liable for any deficiency if they forclose and sell for less than you owe... So, why would anyone ever want to reaffirm a mortgage if there could ever be a deficiency judgement???

We haven't ever been late on our home mortgage, that's why I didn't understand why she would have us reaffirm. I will call her monday and discuss it with her. Thanks everyone for the replys.

 

[Ladynred]

ALL lenders want people to reaffirm their mortgages, it keeps you obligated to them and guarantees they get their money on the original terms and if you can't make the payments, you're liable for the deficiency.

Unfortunately, a 'walk thru' - just keep paying w/o a reaff - is not available in MO. In MO you are required to reaffirm or redeem in order to keep secured property. Since redeeming means you pay a lump sum, current market value, to keep the house, most people can't do it, so they're stuck with the reaff - or they give up the house.

So, unless you want to give up the house, or have a large chunk of money to reedeem, you're stuck with the reaff.