Pay and Stay????

[CCBmama0f3]

We will be filing chapter 7 next week and I have a couple questions about renting after filing Bankruptcy. To give you some background- we at first were going to give up our house and now my husband wants to reaffirm our mortgage. I was agreeabe until I found this website I am trying to explain that we can "pay and stay" and not be liable. He doesn't understand this and thinks that the bank will come take our house and make us move out. Is that possible? What if the economy gets better and they do decide they can make money off our house? What happens as far as tax time with "stay and pay"? Do you still get a tax credit?

This question has to do with renting. If we decided to leave our house and rent, should we apply for it before filing?

Thanks!

[justbroke]

He doesn't understand this and thinks that the bank will come take our house and make us move out. Is that possible? What if the economy gets better and they do decide they can make money off our house? What happens as far as tax time with "stay and pay"? Do you still get a tax credit?

Unless your mortgage/note is with a credit union, the bank will let you stay so long as you "stay and pay". As a matter of fact, under every State that I know of, you can't foreclose upon a mortgage if the person is current and not in default. However, small ankle biters (credit unions and "community" banks) can and have gone back into the Bankruptcy Court to force a debtor to either "abandon" or "reaffirm". Notice that even in that case, the bank had to seek the abandonment of the property by the debtor so that the lender could enforce the rights in the mortgage for abandonment!

This question has to do with renting. If we decided to leave our house and rent, should we apply for it before filing?

I would stay in the home as long as you can and save. The bankruptcy is going to impact your ability to do certain things. Having some savings build up will help you when you do decide to move and you'll need money for deposits and the like.

[CCBmama0f3]

Thank you! I really want to not re affirm our mortgage, I just need to get my husband on board. Hopefully after I get him to read some of these threads he will understand

[discouraged]

Look at the sticky, Why reaffirming a mrotgage is a very, very bad idea. That pretty much explains the why's your husband has questions on.

As for renting, there are two minds. 1) People have moved and the house has remained empty for a long period of time; time they could have stayed and saved. 2) There is a security in having something in place when you file.

I wish I'd known about the pay & stay but, in my case - unemployed, it wouldn't have made sense anyway. Look at the foreclosure posts also. Lots of advice there.

[ryan44]

I'm in a similiar situation with a rental property. I had the property as being surrenders in my BK. However afterwards USbank decided to let me pay and stay. So I thought it was a good idea...however NOW since I stopped paying the mortgage and will let it go into foreclosure they don't want to honor that this is covered in my chapter 7. I didn't reaffirm, I just signed a one page letter letting USbank put my past due payments into a balloon payment at the end of loan. Now they calling me everyday wanted payment even though I'm protected under Chapter 7.

[justbroke]

You need to IMMEDIATELY contact your attorney. They are in violation of the permanent discharge injunction! I would love for my mortgage company to have done what your creditor is doing to you. It is a violation pure and simple. You did not reaffirm the mortgage. They are attempting to collect a debt and their attempt is egregious since they mention that they know about the Chapter 7.