The elevendy millionth reaffirmation question :)

[Tom_Mi]

Hi All,
My wife and I are *pretty close* to deciding to surrender the house.

But maybe we could/should delay it?

Our payment on 240k is only 690 because it's a neg-amortization (don't ask) pmt. In about Jan it's gonna shoot to 1500 or more.

Do you think that if I don't reaffirm, they'll let me stay with the NEGATIVE amortization payment and still walk when it goes up?

And once again, I can walk AFTER discharge with no threat of judgement against me?

[BK2008]

What I understand, is if you don't surrender the house in BK, and later fail to make the payments, you will have a foreclosure (separate from the BK), and the lender can come after you for any balance owing. By surrendering it, BK protects you from that.

I was going to do a ridethrough until I found that out. I decided to surrender it, cutting my losses now instead of having that extra black mark later.So now I'm just waiting...it could be months and months before I have to move out.

[keepmine]

What I understand, is if you don't surrender the house in BK, and later fail to make the payments, you will have a foreclosure (separate from the BK), and the lender can come after you for any balance owing. By surrendering it, BK protects you from that.

I was going to do a ridethrough until I found that out. I decided to surrender it, cutting my losses now instead of having that extra black mark later.So now I'm just waiting...it could be months and months before I have to move out.

That's not correct. You only have liability for any deficency balance if, you sign and then the lender properly files a reaffirmation agreement. That's why a ridethrough is recommended.

[BK2008]

That's not correct. You only have liability for any deficency balance if, you sign and then the lender properly files a reaffirmation agreement. That's why a ridethrough is recommended.

Yup. Forgot that part..the reaffirmation. Thanks for the correction.

I originally reaffirmed my house in BK, and 3 days before discharge..changed my mind, corrected my filing to be 'surrender'. Didn't want to deal with the deficiency after all.

[Tom_Mi]

Thanks...just wanted to be sure the negative amortization (increasing my debt) doesn't create some new non-dischargeable debt.

[bmrigs]

Thanks...just wanted to be sure the negative amortization (increasing my debt) doesn't create some new non-dischargeable debt.

Walk away and never look back

[Frogge]

Walk away and never look back

I think this is good advice.

[fltoo]

Ah, in agreement to walk away. You didn't give us the details of the mortgage in your other post about grandparents.

As you well know in a neg am situation, interest is being added to your principal balance every month, so the balance keeps increasing.

When your payment goes up in Jan, it is because they won't allow you to neg am anymore since your mortgage balance has now met the value of your house.

So, you are still not paying down the principal, just the interest.

Foreclose on it, get a fresh start and let the kids spend weekends with gram and gramps.

[deafbroke]

That's not correct. You only have liability for any deficency balance if, you sign and then the lender properly files a reaffirmation agreement. That's why a ridethrough is recommended.

That is correct. I didn't reaffirm my house, I did a ridethrough, and I just got a notice from mortgage companies attorney saying foreclosure process is going to start. On bottom of notice is reads "If you recieved a discharge in chapter 7 you are not liable for any amount in this suit"

So don't reafirm, and just do a ridethrough. List the mortgage company in the bankruptcy under the real estate owned section. Then after the bankruptcy is closed, you will not be responsible for mortgage after foreclosure.

DB

[r.m]

Tom, this first may possibly be re-worked, but there's a LOT of planning and number crunching and coordinating that has to take place to ultimately end up with a good result.