Chap. 7 almost 3 years ago mortgage dillema

[djkm43]

My wife and I have had to convert to a chpt 7 bankruptcy almost 4 years ago now. I really did not pay much attention to my credit report, but when went to finance a vehicle recently, my lender said my credit was fair, but no mortgage was listed. It turns out my attorney never reaffirmed the mortgages we had and we still to this day have never missed a payment, but found out we are not getting credit bureau reporting to up our scores. Called the attorney and he said he did not reaffirm because it was in our best interest. We cannot sell our house likely due to being at a break even state now, and were told to walk away as it is no longer a legal debt. If we ended up having to do this, how would this show up on the credit file and would it be posted in the paper? Also, since the first mortgage was a Va backed loan, could we ever qualify for a va loan, or any home loan again. Credit score now 622 without mortgages. Please help advise?

[BassBoy]

4 years ago, debtors were allowed to do what is called a Ride Through. This is where the debt is discharged, but as long as you continue to make the payments, you can keep whatever the items are. The downfall to this is that because the debt was discharged, the creditor will not report your payments since you filed/converted to a Ch.7.

If you did decided to walk away from the house, it may appear as a forecloser due to the timeframe. When debtors file Ch.7 and let the home go into foreclosure during the BK process, the reports shows as Included in Bankruptcy, but no foreclosure. With so much time that has passed, it may show up as 2 seperate events.....Incl. in BK and FRCLSR.

I can't say if will not be able to qualify for a VA loan again, but you can definatly qualify for a mortgage, but you will need to let time heal the wounds of the foreclosure. You scores are good now, but after the FRCLSR, you may suffer a substantial hit.

Hope this has helped.

[HHM]

Even if you had reaffirmed, your payment history would not have been reported anyway.
Your attorney is correct, there is usually no benefit to a debtor for reaffirming a mortgage.

I am not sure what you are asking...do you want to stay in the house or move? If you want to stay in the house, then the issue moot.

Ideally, if you walked away, nothing would change in your credit report vis-a-vis the mortgage because the mortgage was included in the BK. But, in the public records section, the foreclosure might appear, but you would need to dispute that entry. And yes, the foreclosure would likely be published (somewhere).