If we signed a home modification....can we still surrender our house???

[LadyInTheRed]

THANKS FOR THE REPLIES


I pulled out our paperwork from chase. Cover letter states: We are please to inform you that you have completed the requirements for a permanent modification to your loan. We have enclosed a sign copy of the Loan Modification for your record.

We signed it on 11-23-2011. Our house mortgage was discharged on 1-26-2012. So im hoping we will be okay if my husband doesnt get another job soon and we have to walk away after staying as long as possible AND NOT GET CHARGED FOR A DEFICIENCY!

As long as you didn't sign a reaffirmation agreement that was filed with the BK court along with the other necessary documents to reaffirm, you will not have to pay a deficiency.

[helpmeout]

The language from the modification agreement says the opposite of what you think it says:



I'm pretty sure "no" should be "not"

Even without that language, a loan modification cannot reaffirm a debt that was discharged in Chap 7, whether it was executed before or after the BK. To reafirm the debt, a reaffirmation agreement must be filed with the court before discharge. It is not possible to reaffirm a debt after it is discharged.

It's the subsequent that's the problem. Subsequent means after signing the modification. Had it not had that particular word in there, I would not have said what I did.

And if it isn't possible to reaffirm a debt after the BK is closed, then why have BK lawyers on this very website stressed the importance of not signing a modification that puts one back on the hook for the debt?

[LadyInTheRed]

And if it isn't possible to reaffirm a debt after the BK is closed, then why have BK lawyers on this very website stressed the importance of not signing a modification that puts one back on the hook for the debt?

I don't know, you'd have to ask them. Can you show me such a post? Language reffirming a debt that was discharged in bankrupty would not be enforceable.

ETA: I meant to reply to the following.

It's the subsequent that's the problem. Subsequent means after signing the modification. Had it not had that particular word in there, I would not have said what I did.

Funny, the person who drafted it didn't know what subsequent means since they used the past tense "received": "If the borrowers received a discharge in a Chapter 7 bankruptcy subsequent to the execution of the loan documents, the lender agrees, that such borrower will no have personal liability on the debt pursuant to this agreement"

Even if they really did mean a discharge entered after the modification, the fact that they do not mention a discharge that pre-dated the modification does not imply an intention to reaffirm the discharged debt. And, even it it did, it wouldn't be enforceable.