reaffirmation agreement

[Anonymous]

I have  been told that I can keep my home and not sign the reaffirmation agreement.  Can anyone tell me what they did? Who didn't sign and still kept there house, do you get to start making payment to the mortgage company again after the discharge?   My lawyer says most people don't sign them, but it is ultimatley up to us. I don't know what to do but want to make the right decision. Who better to ask then those who have been threw it.

  We are keeping are home and are discharge is in less then a month.

[Anonymous]

Check with your lawyer. The way to keep an account without a re-affirmation has always been to just keep paying, and don't include it in the BK.  Re-affirmation usually has a high fee.  My experience was with a car note, NOT a mortgage.

Good luck

[ScoreBooster]

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@Anonymous wrote:

Check with your lawyer. The way to keep an account without a re-affirmation has always been to just keep paying, and don't include it in the BK.  Re-affirmation usually has a high fee.  My experience was with a car note, NOT a mortgage.

Good luck

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Isn't that against the law?

[Anonymous]

1. You must show ALL your debt in bankruptcy, you can't leave out anything
2. NEVER EVER sign a reaffirmation agreement.  It only benefits the lender. 

We had a house in a different state, a car, and an RV. Don't get on my case - we lived in the RV, it was not for fun.  All were included in bankrupcty.  We did not sign any affirmation agreements.  We let the house go to foreclosure.  We continued to pay on the car and the RV.  Once our credit improved, we were able to buy a house.  So we let the RV go.  Once our cashflow improved, we got a better car and let the old car go.  In both cases we contacted the lender and asked where to return them.  We cleaned and waxed them, got all the manuals together, and dropped them off.  We also got a receipt.  No harm, no foul.

 FYI - sold the house at the peak of the market and are in the process of buying a home near the bottom of the market.  Have faith - with careful planning and discipline, things can get better.  Remember, bankruptcy is a financial decision.

[Anonymous]

I had the same question, We have not been discharged as of yet but we did put the house and car in ch 7, but we have continued to make timely payments and are not reaffirming. But Im confused Because WE DO want to walk away from the house in the near future, will it show on our report as a foreclosure or repo for the car.and when can we stop making payments?   

[ScoreBooster]

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@Anonymous wrote:

1. NEVER EVER sign a reaffirmation agreement.  It only benefits the lender. 

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I disagree. It totally depends on your situation. If you want to keep your car and the lender insists on a reaffirmation, you either have to sign it or return the car.

I will reaffirm because I want to have the future payments reported (which will be part of the agreement). Without reaffirmation, lenders usually stop reporting after discharge. So in regards to your future credit, there are situations where it makes sense to reaffirm - unless it's a crazy payment you simply can't offerd in the first place.

I will need a car after my discharge, too, so why shouldn't I keep my tradeline alive to rebuild my credit? In addition, it's quite possible you won't be able to get a better loan than you currently have because you have a BK on file.

It totally depends what your goal and individual situation is.

Message Edited by ScoreBooster on 02-03-2009 02:58 PM

[Anonymous]

So if included in BK made timely payments, DID NOT SIGN AFFIRMATION, than decided to walk away will it show on my report discharged or foreclosure. My car payment Is ridiculous so if I also walked away from it after discharge would it show?

[Anonymous]

If you reaffirm your loan, you are again on the hook for it.  The loan company will want you to reaffirm, if you believe you will not be able to continue with mortgage payments or your job security it questionable in this current market, i would not sign.  You can keep your home as long as you stay current with your monthly payments.  Our loan company nagged and nagged for us to reaffirm.  But I did not do so, after a few months they finally got the picture after sending them a letter. 

Nothing will be any different on your credit report or your BK if you do or dont reaffirm.  But if you reaffirm and you lose the house....good luck with that.  They will come after you or you can try and draw it out for 8 more years.

[ScoreBooster]

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@Anonymous wrote:

Nothing will be any different on your credit report or your BK if you do or dont reaffirm. 

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Oh, it will.

I'm not in the position to judge it this particular mortgage should be reaffirmed (it may not be necessary for the sole purpose of keeping the house), but the credit-reporting WILL be influenced by that decision.

If you sign a reaffirmation...your tradeline is noted "Included in BK- Reaffirmed Debt". Your continued payment history will be reported and as long as you are on time it will continue as a satisfactory account. If you do not sign a reaffirmation and just continue to make payments...the tradeline will only show as "Included or Discharged in BK" and they will not report any payment history..because it is debt and they are not permitted by law to report anything more after the BK filing date on such an account of this categorization.

Don't get me wrong - 95% of loans SHOULDN'T be reaffirmed but there are exemptions to this rule. Some car-loans are a few of those (depending on your LTV etc.).

Have you heard about the "Auto Enhanced" FICO-scores? A perfect example where it DOES make a difference if your car-loan was discharged or reaffirmed.

Message Edited by ScoreBooster on 02-06-2009 09:29 PM

Message Edited by ScoreBooster on 02-06-2009 09:29 PM

[emptypockets]

If your lawyer told you not to sign the reaffirmation, there must be a good reason. The Court must make a finding (based on your income, etc.) that it is IN YOUR BEST INTEREST to reaffirm the debt. When I filed (2002) my Mortgage Co. never sent the reaffirmation agreement - the lawyer requested it, but they never sent it. I also had a HELOC which was reaffirmed (I didn't even remember signing it). I did not sign one on my car (it was a lease, and I bought a new one with a co-signer prior to turning it in). It was always my intention to keep the house, and I maintained (on time) the payments for 3 years, during which I attempted to re-fi (the mortgage was not showing on my Credit Report). Eventually the payments got way too high (escrow acctcaused payment to go up 350.00 per month).

I then had an "AHA" moment, and realized I could walk away and not have to pay for the house since it was not reaffirmed. By this time it was 3 years since my BK, the Mort. was not showing on the Credit report, and I had 3 years of on time payments on newly acquired credit. I applied for a mortgage on a new house, and walked away from the old one. During this time, I stilll paid the Heloc (11K) because I had reaffirmed it ( it was showing on my CR as BK account - reaffirmed debt). After I bought the new house, I wrote a letter to the Mort. Co. for the Heloc, and was able to settle it as PIF for 4K. For some reason, the Heloc no longer shows on my credit at all. The First Mort. shows as Included in BK. It does not show a foreclosure for the house, nor does it show a repo for the car, even though I turned it in after the discharge. It also shows as as included in BK. My credit has since rebounded to EQ 690, EX 709, TU 703.

As state above, BK is a financial decision. I had to make decisions based on what was best for me at the time. You should explore all your options, because if the situation that caused your BK still exists (i.e. reduced income, etc.) you do not want to do anything that will cause you to stay "in over your head." You are entitled to a "Fresh Start" and you should take this chance while it is there.  

Message Edited by emptypockets on 02-09-2009 11:38 AM