Can we keep the home if we did not reaffirm the loan during bankruptcy? 22 Answers as of June 22, 2011

We filed chapter 7 bankruptcy on credit card debt and reaffirmed the home loan by saying that we plan on keeping out home. My bank is telling me the loan was not reaffirmed. So what should I do? Can my bank now come take our home because the loan was not reaffirmed? I checked the Bankruptcy papers and the box is checked to reaffirm the debt. My paralegal that handled papers for our bankruptcy just told me I should have gotten a notice to appear at a reaffirmation hearing but we never got that notice. And my bank is saying they did not get anything either. We want to keep our home and pay it off. So far the payment is affordable provided my spouse's job holds out. What do we do?

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Cartwright Law Firm
Cartwright Law Firm | Andrea Cartwight
It is not required to sign and filed a reaffirmation agreement concerning real property in bankruptcy. Your former attorney should have explained to you how a reaffirmation works. While the debt has been discharged in bankruptcy, as long as you continue paying your mortgage payments on a timely basis you would be able to keep your home. However, if you are unable to afford the mortgage payments in the future, you also have the option of walking away from the mortgage without any further legal obligation. I hope I have adequately answered your question. Good luck in rebuilding your credit!
Answer Applies to: Michigan
Replied: 6/22/2011
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
First of all.... and this makes me crazy when it happens, there is no requirement under the bankruptcy code to file a reaffirmation agreement on home. Second, it is the creditors responsibility to send you a reaffirmation agreement, (if one was necessary) . They are giving you grief because you don't have a lawyer. Keep making the payments.
Answer Applies to: California
Replied: 6/21/2011
The Law Office of Mark J. Markus
The Law Office of Mark J. Markus | Mark Markus
Do nothing except maintain the contractually due payments on your mortgage(s). You're very lucky that you didn't reaffirm the debt. There's no benefit to you reaffirming a real estate debt. You just pointed out one of the biggest reasons not to use a paralegal or inexperienced attorney.
Answer Applies to: California
Replied: 6/21/2011
CONSUMER PROTECTION ASSISTANCE COALITION, INC. (DE).
CONSUMER PROTECTION ASSISTANCE COALITION, INC. (DE). | Gary Lee Lane
There are several disputes here so the facts will have to be proven to the court. If the reaffirmation was in fact determined to have been done, you may keep the home if the court affirms that and you and the lender agree on terms for staying.
Answer Applies to: California
Replied: 6/20/2011
Burnham & Associates
Burnham & Associates | Stephanie K. Burnham
It is not enough to just fill in the box that says you wish to reaffirm. You must submit a reaffirmation agreement to the Bankruptcy Court. If you only used a paralegal and not an attorney, the paralegal may not have followed up and ensured that the reaffirmation agreement was obtained and signed. In the meantime, so long as you continue to pay the debt, the mortgage company has no incentive to foreclose on your property.
Answer Applies to: New Hampshire
Replied: 6/20/2011
    Law Office of Maureen O' Malley
    Law Office of Maureen O' Malley | Maureen O'Malley
    Homes are not generally reaffirmed, as that removes its bankruptcy protection. Did your paralegal work for an attorney? I'd check with him/her. Usually, the debtor keeps paying on the house and as long as it's paid on time they won't repossess.
    Answer Applies to: Virginia
    Replied: 6/20/2011
    Indianapolis Bankruptcy Law Office of Eric C. Lewis
    Indianapolis Bankruptcy Law Office of Eric C. Lewis | Eric Lewis
    If the case has been closed, it is too late to reaffirm on the note, even if you indicated your intention to do so on the Statement of Intent. As long as the bank is willing to accept payments and you abide by the terms of your already existing loan, you should be able to keep the house and maintain payments to satisfy the mortgage but you will not likely be able to modify or refinance without having reaffirmed the debt.
    Answer Applies to: Indiana
    Replied: 6/20/2011
    Rosenberg & Press
    Rosenberg & Press | Max L. Rosenberg
    Everything is ok as long as you continue to make payments on time for your mortgage. You are not required to reaffirm your mortgage and in fact many people do not. You did not, despite any boxes you may have clicked. Furthermore a reaffirmation hearing would only occur if you filled out a reaffirmation agreement separate from your petition. And if you executed such a document and returned it to the bank for their signature and filed it, you would likely not need a hearing regardless. Most of these agreements are taken on the papers. There are some negative consequences however for not filing a reaffirmation. You may have difficulty securing any modification of the loan. The bank may discontinue reporting your timely payments on your credit reports, which does not hinder but also does not aid your credit score. Finally, what do you mean, paralegal? Did you use a paralegal instead of a trained and experienced bankruptcy attorney familiar with all the specific exemptions, standard forms and procedures? When dealing with bankruptcy I cannot stress highly enough the need for experienced counsel. Thank you for tuning in!
    Answer Applies to: Connecticut
    Replied: 6/20/2011
    Symmes Law Group, PLLC
    Symmes Law Group, PLLC | Richard James Symmes
    After filing for chapter 7 bankruptcy, a debtor should never sign reaffirmation papers on a home. As long as you continue to make payments on your home, no reaffirmation agreement is necessary. You lender will continue to accept payments and will not foreclose unless you fall behind on your payments. Not signing a reaffirmation agreement is beneficial to you, because if a foreclosure does happen, then you will not be liable for any of the debt, if you sign the reaffirmation agreement you will be liable for the debt in the future.
    Answer Applies to: Washington
    Replied: 6/20/2011
    Carballo Law Offices
    Carballo Law Offices | Tony E. Carballo
    In California you do not need to reaffirm mortgages. Don't worry about it. Just make sure you make the payments on time. Next time get a lawyer and not a paralegal that apparently does not know much. Checking the box that says you intend to reaffirm a mortgage does not mean you have reaffirmed the mortgage. You have to actually sign a reaffirmation agreement that needs to be signed by the bank and then approved by the bankruptcy court. Again, that is not required in California because the bank needs to foreclose and no foreclosure can happen if you are current on the mortgage. If you live in another state then consult with a bankruptcy lawyer. Never trust what the bank representative tells you on the phone. Most of the people who answer the bank phones have no idea about the laws in each of the 50 states.
    Answer Applies to: California
    Replied: 6/20/2011
    Bankruptcy Law office of Bill Rubendall
    Bankruptcy Law office of Bill Rubendall | William M. Rubendall
    A reaffirmation agreement is in writing between the creditor and the debtor. Simply checking the box in the Statement of Intentions form is not a reaffirmation. If the lender had wanted a reaffirmation agreement at the time of the bankruptcy they would have sent one to you. Signing a reaffirmation agreement for a home loan is almost never done. The reason is that the lender retains its security interest in the property. If you don't pay they can foreclose. They aren't going to foreclose if you pay them pursuant to the loan. It sounds like you have been paying them all along and are current with the loan, taxes and insurance. Talk to your lender if there is any doubt in your mind that the foregoing is the situation.
    Answer Applies to: California
    Replied: 6/20/2011
    Bird & VanDyke, Inc.
    Bird & VanDyke, Inc. | David VanDyke
    Home mortgages are rarely re affirmed. As long as you continue making payments you can keep the home.
    Answer Applies to: California
    Replied: 6/20/2011
    Judith A. Runyon, Esq. Attorney at Law
    Judith A. Runyon, Esq. Attorney at Law | Judith A. Runyon
    Mortgage loans are not reaffirmed in Ch. 7, only car loans, if you want to keep them.
    Answer Applies to: California
    Replied: 6/20/2011
    The Schreiber Law Firm
    The Schreiber Law Firm | Jeffrey D. Schreiber
    Keep making the payments. In many states which have an anti-deficiency statute (bank cannot come after the borrower if the house sells at foreclosure for less than what is owed), the bankruptcy courts will not allow a reaffirmation on a mortgage debt as you waive your anti-deficiency rights and you become liable for the entire mortgage debt in the event you default later on and it is not subject to the bankruptcy discharge. If you were current when you filed and remain current on your mortgage loan, most banks do nothing but take the payments. After time, if the bank changes it position and wants to start foreclosure just because of the bankruptcy, they are subject to the defenses of waiver and estoppel since they can't go on taking payments then for no other reason start foreclosure.
    Answer Applies to: California
    Replied: 6/20/2011
    Daniel Hoarfrost, Attorney at Law
    Daniel Hoarfrost, Attorney at Law | Daniel Hoarfrost
    As long as the bank continues to accept payments on the home loan, they have to honor the contract and you can keep your home.If they refuse payments and start a foreclosure, then you can consider a Ch 13 to deal with the mortgage.
    Answer Applies to: Oregon
    Replied: 6/20/2011
    Bankruptcy Law Office of Robert Weed
    Bankruptcy Law Office of Robert Weed | Robert Weed
    All you have to do is keep paying. O
    Answer Applies to: Virginia
    Replied: 6/20/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    First the bad news: You did a very dumb move using a paralegal, and the paralegal committed a crime (and misled you badly) with what she said, which was wrong. She also did your papers wrong. Having said that, you usually can retain and pay on a home without a reaffirmation and usually they are NOT used in such cases. Because your post indicates multiple screwups by a paralegal, you may have more waiting down the road, so see a lawyer to review what else she screwed up. And the next time you have a problem, see a real lawyer.
    Answer Applies to: Georgia
    Replied: 6/20/2011
    Breckenridge and Walton
    Breckenridge and Walton | Alan D. Walton
    Yes, as long as you remain current. Most attorneys NEVER recommend reaffirming on real estate, so nothing was done wrong in your case. If you get behind and lose the house not reaffirming means the lender cannot seek a deficiency from you.
    Answer Applies to: Michigan
    Replied: 6/20/2011
    Law Offices of Joseph A. Mannis
    Law Offices of Joseph A. Mannis | Todd Mannis
    As long as you stay current on the home, you may keep it. The reaffirmation is not only not required, but for various reasons is usually not in your best interests, so much so that often judges will refuse to sign off on a reaffirmation agreement on the home. Just keep making your payments and stay current, and you'll keep the property.
    Answer Applies to: California
    Replied: 6/20/2011
    Ursula G. Barrios Law
    Ursula G. Barrios Law | Guillermo Machado
    Yes as long as you continue to pay it.
    Answer Applies to: California
    Replied: 6/20/2011
    Hanson & Hanson
    Hanson & Hanson | Anna C. Hanson
    The bankruptcy schedules include a form called "Statement of Intention". It's on this form that you indicate whether you plan on reaffirming property. However, checking the box on this form only means that you plan on reaffirming the debt, it doesn't actually reaffirm it. You are still required to sign a reaffirmation agreement -a new contract signed by both you and your lender. Your attorney should have made sure this took place before you received your discharge. However, you can still reaffirm the debt after receiving your discharge, but it means you will need to hire an attorney to re-open your case and then execute a reaffirmation agreement between you and your lender.
    Answer Applies to: Oklahoma
    Replied: 6/20/2011
    Law Office of Nanina Takla
    Law Office of Nanina Takla | Nanina Takla
    You are not required to file a reaffirmation agreement for real property. It sounds like what you did was indicate that you intended to to reaffirm your mortgage on the Statement of Intentions that you filed as part of the bankruptcy paperwork. This is not the same as reaffirming your mortgage. As long as you are current on your mortgage payments, your mortgage company cannot foreclose on you. Your mortgage company might refuse to report your mortgage payments to the credit reporting agencies and may also refuse to send you statements and/or payment coupons because you filed bankruptcy. Technically, they are correct since you don't owe the mortgage company any more since you didn't reaffirm the debt. The mortgage company still has a lien on your house however, so even if they are not sending you statements, you must make your monthly payments on time or you could end up losing the home. It's a little concerning that the person you hired to help you with the bankruptcy doesn't understand this - if you hired a paralegal rather than a lawyer, then your confusion highlights the problems of trying to do a bankruptcy without an experienced bankruptcy attorney.
    Answer Applies to: Oregon
    Replied: 6/20/2011
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