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    Reaffirmation Questions

    I am strongly considering filing for Ch. 7 bankrupcy soon. I do not plan on re-affirming on my mortgage, but am going to remain current and continue to live there. I have a few questions.

    1) Will my mortgage company send me a 1098 form showing the interest paid during the year and can I still deduct the interest on my taxes?
    2) Should I pay my property taxes/insurance on my own and not include them in my monthly mortagage payments as I have been doing, or do I continue to pay the same amount and have an escrow account?
    3) Do I need to have homeowners insurance since I am no longer liable for the property? Or do I really only need renter's insurance for my personal stuff.
    4) Do I still need to pay PMI? If yes, can and/or will that be cancelled anywhere down the road?

    Thanks for the help!

    #2
    If you want to stay in the house:


    1.) yes

    2.) if escrow was a condition of your original loan docs, keep it. if it's optional and you want out, make that arrangement with your lender.

    3.) yes - if you drop the homeowner's insurance, you will be in default. (renter's is an option when you expect/want foreclosure, have stopped paying the mortgage, have an expired homeowner's policy, have a lender-placed policy that doesn't cover your stuff, etc)

    4.) yes - if you don't make the entire payment expected, you will be in default.
    Last edited by debee; 02-23-2011, 01:45 AM. Reason: needed more space baby
    There are two secrets for success in life:
    1.) Never tell everything you know.

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      #3
      Hi msmith, Hi debee,

      debee has you covered, the only thing I would add is that you might have a homeowners policy being paid out of the escrow. And while you are checking to see if you have a policy being paid from escrow, check to see what it covers. As debee said, it might not cover your belongings, just the house itself.

      Hope this helps,

      Tom in Colo
      Ch7 filed 5/12/2010.....341 meeting 6/30/2010....report of no distribution 8/15/2010.....discharged 10/01/2010.....closed 11/09/2010

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