Trouble with mortgage not re-affirmed, but included in bankruptcy.

[Anonymous]

I recently filed and was discharged from a Chapter 7 bankruptcy.   I did not reaffirm my mortgages 1st and 2nd with the mortgage company, but have been making payments.  Both mortgages are still showing on my credit report.   The problem is I have had a loss in income and can not afford to pay the mortgages.   What are my options?  Because they are still reporting the mortgages I am concerned about late payments showing up.  Can I dispute them showing any lates after the bankruptcy?  I feel a moral obligation to help the lender any way I can and am willing to do a short-sale or deed-in-lieu, my question is how will this reflect on my credit report? 

[Anonymous]

clogan - Because you included these in your bk, you legally no longer owe the debts and can walk away without owing the lender anything further.

If you decide to walk away and stop making payments, the day you decide this you need to dispute both loans with all 3 CRA's.   Dispute them as "included in BK".   By law, they cannot report anything negative AFTER the month you filed BK.  Since you were current on your payments at the time of your BK, they would simply have to report "Included in BK" and "Never Late".

Regardless of whether the lender will do a short sale or DIL, none of that can be reported on your credit report - only the "IIB" notation and NO late payments.

[Anonymous]

Thanks so much for the information.   I have an additional question.  Because I do have a first and a second on the home, the value has definitely declined so I think it is undersecured.   What do you think the first and second mortgage companies will do.  I really did intend to make the mortgage payments in good faith.  However, I can't and am wondering does that give me any negotiating power i.e. the ability to modify the loan with terms I can afford.   Obviously, I want to help the lender, but quite frankly I am curious as to possible outcomes.   Let me know what you think.