Surrender house after Ch. 13 plan confirmed?

[iwillriseabove]

My situation is this: Husband and I filed ch. 13 in summer. We included 3 or 4 months of mortgage arrears in the ch. 13 and now we are getting a divorce. I am struggling to make the mortgage payment and don't think I can for much longer. I drive very far to work every day and with gas being what it is, I need to move closer to my job. Is my only option just to let it go into foreclosure with nothing to do with the BK? It is on the market right now but we haven't had any offers. Please help!

[lrprn]

A very important question to ask first - did you reaffirm the home's mortgage(s)?

[iwillriseabove]

I'm not sure exactly what that means, to reaffirm. On my statement, it still shows that we are MONTHS behind on the mortgage and has since we filed in the summer. I immediately called the mtg. company and they said that it would stay like that but not to worry about it b/c the house was in the bankruptcy. I don't know if that helps. In what way would the answer to my question be different if we reaffirmed or not?

[imbroke2]

I had no idea you have to reaffirm a mortgage in a chapter 13. Our lawyer never mentioned that to me. And our statements always say "We are aware of your bankruptcy..."
Hmm, makes me wonder.

[lrprn]

Technically the current bk law states you are to indicate whether you intend to "reaffirm, redeem, or surrender" each of your assets when you file Ch 7 or Ch 13. However, so far since Oct 2005 when the current law went into effect, most lawyers recommend against reaffirmation of any secured asset because if something goes wrong in the future and the debtor find him/herself in financial trouble again, they won't owe the debt. 99.9% of lenders leave your asset alone as long as you are making on-time payments even if you don't reaffirm.

To understand how reaffirmation, redemption, and surrender of a secured asset in bankruptcy work, see http://www.moranlaw.net/secured7.htm