Discharged - Reaffirmation

[drew999999]

Okay... so I thought this madness was over, but I stand corrected. After completing my plan and deciding it is now time to start fixing my credit, I got a copy of my report. To my surprise, my house that I've been paying on for 13 years is no longer showing up on my report. I was in a 100% payback with my mortgage not included in the plan. I called my mortgage company and was told that I should have filed a reaffirmation agreement while the plan was active. I asked them what I needed to do to get this reported again and was told to re-open the case, file the agreement, then have it closed again. I then asked if the history would also be reported and was given an 'I'm not sure' answer. Grrrrrr....

Anyone have experience with this?

[jange]

drew, I don't have an answer for you but I know my home equity loan no longer reports when it did until last year. I still have 8 months left, so I am very interested in anyone's answer. I didn't think in a ch13 we did reaffirmations, I thought they were for ch7. But of course I could be wrong.

[justbroke]

First, you cannot re-open a discharged case for the sole purpose of "entering" into a reaffirmation agreement.

What's more important, is that there is no reaffirmation agreement (process) in a Chapter 13. The Chapter 13 is a Reorganization of the Debtor and your Chapter 13 Plan serves as a payment contract to repay certain debts. Those debts that you surrender or are not "provided for" in the plan, are discharged (unless excluded under a section of the bankruptcy code which provides for certain debts to remain non-dischargeable).

It is up to the creditor to report and they are not required to report either your debt or your payments. The requirement is solely that if they do report, that reporting is accurate. Most creditors just stop reporting debt "included" in a bankruptcy, zero out the account, and some even will remove the entry for fear of a discharge violation.

Since you provided for the mortgage in your Plan, and did not surrender the collateral, the creditor would be allowed to report the payment history once your case is closed. (They wait until closing to avoid any potential issue(s).)

You may need to speak with the creditor's bankruptcy department. In some cases, these mortgage creditors will report the payment history if the debtor (or debtor's attorney) signs an agreement that it was both requested and that the debtor would not bring any discharge/stay violation actions for the creditor doing so.

[drew999999]

Thanks JB! I tried explaining to the customer service guy that there are no reaffirmations in 13 cases and he insisted otherwise. It got to the point that I began second guessing what I knew about it and caved in. I'm reading up and will make another call next week.

[kmjatl]

Thanks JB! I tried explaining to the customer service guy that there are no reaffirmations in 13 cases and he insisted otherwise. It got to the point that I began second guessing what I knew about it and caved in. I'm reading up and will make another call next week.

Any chance you can refinance and end up with a fresh payment history?

Is it like this on all 3 reports or just one?

[spidge]

I don't know your goal here, but if you hope for a lower payment inquire with your lender to see if they will recast your loan. It will likely require you to pay 10% of the outstanding balance toward the principle but you could end up with a lowered payment requirement.

[drew999999]

Called them back a bit ago and was told that they first guy that I spoke with was incorrect. They do stop reporting during the case, but will start reporting again after the first payment is made after discharge. I also noticed that both cars that I paid off outside of the plan are missing, so this must be somewhat common for secured creditors. My plan is to refinance out of my 7% VA loan to a lower conventional. Would like to free up my VA eligibility just incase we decide to upgrade/downgrade sometime in the future. Luckily, I've had my current loan for over 15 years and never took an equity loan, so equity is on my side. My current score is in the 620s, so there is hope. Worst case is to do a streamlined VA refi to a lower rate, but want to get my credit report straight first to see where the numbers fall. No credit cards in my immediate future.... That's what got me here in the first place. Just looking to take advantage of the current rates while they last.

[justbroke]

Once your case is actually closed and the mortgage re-reports, your score should go up by several tens of points. I'm totally guessing, but I wouldn't be surprised if it bounced to about 660 with a positive reporting of the mortgage loan. I also wouldn't be surprised if it stayed the same. What I'm saying is... we won't know until we see the case closed and the items reporting again!