Reaffirmation Necessary?

[Backlyn]

When we filed we have a statement of intention included that states we will retain our home and truck and keep making regular payments. We have kept our mortgage and truck payments current. Is reaffirmation necessary or is this enough for use to see out the loans in PA?

[bktek]

Filing the statement of intention does not obligate you to retain or reaffirm the debt. It simply notifies the BK court of your intentions toward your secure property. Retaining means you would have to pay the balance of the loan immediately. Reaffirming would legally obligate you to continue loan payments. Contact your creditor(s), or have your lawyer do it, and inquire about retaining or reaffirming. If the creditor agrees to reaffirm, they will provide the paperwork and that must be filed with your BK and approved by the BK judge.

If you are current on your mortgage, you can probably "ride through," that is continue to send your monthly payment and stay in the home without reaffirming the loan. Then, if your situation worsens you can walk away from the house without being responsible for the debt.

For sure, check with your attorney and the creditor before making a final decision on reaffirmation. If you reaffirm those loans, you are accepting full legal responsibility for the debt. That's why most attorneys, and most people here, recommend against reaffirmation.

[pcn]

Anyone know if there are any districts that require reaffirmation?

[OhioFiler]

Filing the statement of intention does not obligate you to retain or reaffirm the debt. It simply notifies the BK court of your intentions toward your secure property. Retaining means you would have to pay the balance of the loan immediately. Reaffirming would legally obligate you to continue loan payments. Contact your creditor(s), or have your lawyer do it, and inquire about retaining or reaffirming. If the creditor agrees to reaffirm, they will provide the paperwork and that must be filed with your BK and approved by the BK judge.

If you are current on your mortgage, you can probably "ride through," that is continue to send your monthly payment and stay in the home without reaffirming the loan. Then, if your situation worsens you can walk away from the house without being responsible for the debt.

For sure, check with your attorney and the creditor before making a final decision on reaffirmation. If you reaffirm those loans, you are accepting full legal responsibility for the debt. That's why most attorneys, and most people here, recommend against reaffirmation.

Also, most judges are opposed to reaffirmation agreements.

[bktek]

Anyone know if there are any districts that require reaffirmation?

You cannot be forced into a reaffirmation agreement.

[Backlyn]

My attorney advised us to not reaffirm. I was just making sure we could still retain home and vehicle with current loans and that as long as we continue to keep them current we can eventually own it all. Since my chapter 7 turned asset after I was assured of exemptions by my lawyer, I am questioning everything.

12-4-09 341 hearing
1-27-10 trustee objection to exemptions
2-25-10 hearing scheduled to answer objections

[pcn]

You cannot be forced into a reaffirmation agreement.

Maybe not, but in our district we were told that we had 3 choices:
Reaffirm
Pay it off
Give it up

Ride through was not an option.

[bktek]

My attorney advised us to not reaffirm. I was just making sure we could still retain home and vehicle with current loans and that as long as we continue to keep them current we can eventually own it all. Since my chapter 7 turned asset after I was assured of exemptions by my lawyer, I am questioning everything.

I think that's probably correct with the mortgage loan, but do talk to your lender's BK department to be sure they'll allow a ride through. As far as I can tell, some states mandate that you must be allowed to stay in your home if your current, but it seems that others don't.

The vehicle may be a different matter. I've read several times on this forum that vehicles have been repossessed even if the loan was current.

[bktek]

Maybe not, but in our district we were told that we had 3 choices:
Reaffirm
Pay it off
Give it up

Ride through was not an option.

Possibly so, but that can't be characterized as requiring you to file a reaffirmation agreement. Giving up the property is an alternative, and one that many filers choose. If you're talking about a mortgage loan, I'd be sure to check further, though. A lot of states won't allow a lender to take your home as long as you're current on the payments.

[OhioFiler]

Maybe not, but in our district we were told that we had 3 choices:
Reaffirm
Pay it off
Give it up

Ride through was not an option.

Give it up may well be a ride through.

Just because those are the only legally defined choices doesn't mean the creditor and debtor have to do such a thing. You can choose to surrender the asset but post-discharge keep it and keep paying for it. It defaults to a ride through. The court will not come back to you and the creditor and force you to return the asset.

[pcn]

I wonder how that would work with a mortgage? Current, and want to keep.

[keepswimming]

What if you are current but do not know if that will be a possibility in the near future?

[Pasofino]

Give it up may well be a ride through.

Just because those are the only legally defined choices doesn't mean the creditor and debtor have to do such a thing. You can choose to surrender the asset but post-discharge keep it and keep paying for it. It defaults to a ride through. The court will not come back to you and the creditor and force you to return the asset.

Are you saying to put the "surrender choice" for your home that is current on payments?
And the car?

[cocojambo]

Normally you would reaffirm a mortgage or car loan if you have built equity in to it, because if you do not continue to make payments, you could lose the equity. But if you own a house with $0 down, you wouldn't care about reaffirming, you'd simply walk away!

[dm415]

You cannot be forced to sign a reaffirmation.its illegal...