What hppens if I don't reaffirm my mortgage in bankruptcy? 14 Answers as of May 20, 2011

I recently filed for bankruptcy and it has not been discharged yet. I would like to know the pros and cons with regard to reaffirming my mortgage.

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The Northwest Debt Relief Law Firm
The Northwest Debt Relief Law Firm | Thomas A McAvity
You will be able to surrender your home in the years to come without any threat of recourse from the bank beyond foreclosure. Depending on the jurisdiction that in which you filed, reaffirmation of your mortgage may not even be possible as many judges are extremely reluctant to sign off on these agreements.
Answer Applies to: Oregon
Replied: 5/20/2011
Dearbonn Law Offices
Dearbonn Law Offices | Ajibola Oluyemisi Oladapo
If you file BK and are current in your Mortgage payments, you do *not*need to reaffirm your mortgage, all you need do is to continue to remain current on your payments, this will keep the loan active without the necessity of a re-affirmation.
Answer Applies to: Washington
Replied: 5/17/2011
Burnham & Associates
Burnham & Associates | Stephanie K. Burnham
Reaffirmation of a debt results in the personal liability for the debt being brought back on the Debtor. It's as if you never filed Bankruptcy at all with respect to the debt you are reaffirming. Reaffirmation can be good for your credit if you can afford to make the payments, intend on retaining the asset that debt relates to, and are on time making payments. Reaffirmation is a bad idea if you have any doubts at all about whether you can make payments or are unsure if you intend on keeping the asset.
Answer Applies to: New Hampshire
Replied: 5/17/2011
Jackson White, PC
Jackson White, PC | Spencer Hale
If you don't reaffirm your mortgage, you can still keep your house so long as you continue paying the mortgage. However, the bank holding the mortgage no longer has a duty to report your payments to the credit bureaus.
Answer Applies to: Arizona
Replied: 5/17/2011
Bankruptcy Law office of Bill Rubendall
Bankruptcy Law office of Bill Rubendall | William M. Rubendall
If you don't reaffirm your mortgage in bankruptcy the lender still retains its security interest. As long as you continue paying the loan nothing will change. If you default on the payments the lender can foreclose, but the bankruptcy discharge means you will have no personal liability for any debt owed on the property to the lender. The difference with a formal, approved written reaffirmation is that a lender can pursue you for a deficiency judgment after foreclosure. It is almost never advisable to reaffirm a mortgage therefore. This is a complicated issue and you should seek the advice of an attorney who is a certified specialist in bankruptcy law. Consult the State Bar website for a listing of those attorneys in your area.
Answer Applies to: California
Replied: 5/16/2011
    Indianapolis Bankruptcy Law Office of Eric C. Lewis
    Indianapolis Bankruptcy Law Office of Eric C. Lewis | Eric Lewis
    If you reaffirm the debt, it keeps you on the hook for the mortgage note just the same as if the bankruptcy never happened. The benefit is that in reaffirmation, you are in a position to refinance or get a loan modification down the road. If you don't reaffirm, you can walk away from the mortgage and not be on the hook, but if you want to keep the house and later decide to refinance, you may be denied the modification by your bank because of the failure to reaff.
    Answer Applies to: Indiana
    Replied: 5/16/2011
    The Law Office of Mark J. Markus
    The Law Office of Mark J. Markus | Mark Markus
    There aren't really any pros, So I'll list the cons. If you reaffirm your mortgage, you may be responsible for the payments for the full amount of the loan. Thus, if you become delinquent on your payments and your house gets sold or foreclosed on in the future for less than you owe on that mortgage, you may be responsible for the deficiency. This depends in part on the laws of your state. I guess one "pro" would be that if you reaffirm then the ongoing payments you make will count towards re-establishing your credit, but you can do this via other methods a lot less burdensome than tying yourself to a mortgage debt.
    Answer Applies to: California
    Replied: 5/16/2011
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    Never reaffirm on a mortgage. The bankruptcy code does not require it. You can still keep paying on it if you want and keep it.
    Answer Applies to: California
    Replied: 5/16/2011
    Bankruptcy Law Office of Robert Weed
    Bankruptcy Law Office of Robert Weed | Robert Weed
    You almost never want to reaffirm a mortgage. The pros are, it will help your credit score a little assuming you can afford to pay. The cons are, later if you can't pay or can't sell you will ruin your after bankruptcy credit and you'll get sued. The downside is lots bigger than the upside.
    Answer Applies to: Virginia
    Replied: 5/16/2011
    Ursula G. Barrios Law
    Ursula G. Barrios Law | Guillermo Machado
    In my experience, it's best not to reaffirm mortgage because you attach yourself to liability again, barring anti-deficiency statutes. If you wish to keep house, simply make payments each month on contract without reaffirming. This is a general policy with most banks.
    Answer Applies to: California
    Replied: 5/16/2011
    Judith A. Runyon, Esq. Attorney at Law
    Judith A. Runyon, Esq. Attorney at Law | Judith A. Runyon
    Mortgages are a secured debt and you do not reaffirm mortgages in bankruptcy. If you subsequently lose your home after bankruptcy you are not liable for any deficiency that results from the sale of the home.
    Answer Applies to: California
    Replied: 5/16/2011
    Greifendorff Law Offices, PC
    Greifendorff Law Offices, PC | Christine Wilton
    You are not obligated to reaffirm a mortgage in bankruptcy. Don't do it. So long as you want to remain in your home, you will need to continue to make your monthly mortgage payments. A reaffirmation agreement has nothing to do with whether you get to keep the collateral [the house/car]. Rather, it has everything to do with whether the DEBT owed for it is discharged. If the debt is reaffirmed, it is effectively removed from your bankruptcy case and the debt is NOT discharged. This means that you remain legally liable for that debt after your bankruptcy case. If you can no longer afford your home under this scenario, you're still legally stuck with that debt. If the debt is not reaffirmed, then the debt remains under the protection of the bankruptcy case and will be discharged at the end. This is why you do not want to reaffirm a mortgage debt ever.
    Answer Applies to: California
    Replied: 5/16/2011
    Symmes Law Group, PLLC
    Symmes Law Group, PLLC | Richard James Symmes
    I debtor in bankruptcy under most circumstances should never reaffirm a mortgage. I have never heard of a case where a debtor foreclosed on a home because a debtor did not sign a reaffirmation agreement. The negative effect of signing a reaffirmation agreement on a mortgage is that you are liable for the debt after your bankruptcy has discharged. If you do not sign a reaffirmation agreement, you will not be liable for the debt post bankruptcy.
    Answer Applies to: Washington
    Replied: 5/16/2011
    Law Office of L. Paul Zahn
    Law Office of L. Paul Zahn | Paul Zahn
    Generally, if you do not reaffirm the mortgage, you will be able to retain the property if you remain current on your payments. If not, then you will lose the home but will not be liable for a deficiency judgment if you cannot make the payments. If you do reaffirm the debt, then you waive the benefits of bankruptcy protection, but you will definitely keep the home so long as you make your payments. If you are in my area and are looking for a bankruptcy attorney, please contact me for a free consultation.
    Answer Applies to: California
    Replied: 5/16/2011
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