Reafirming house and car

[AngelinaCat]

Good wishes to you. We will be watching you at the Finish line.

[livingdream]

Well, folks.....an update. I had my court date yesterday and after feeling fairly calm about all this, I found the last few days before court I was feeling a bit nervous. But, all went well. I asked my attorney more about reafirming the house and car and she said that both had very low interest rates and the house is not upside down. Our car loan is 1.9% and the house is 4.75%. She said that if we owed more on the house than it is worth she would suggest not reafirming. But, for us she felt that reafirming was a good idea. That's what we did. She said that reafirming will mean that both those loans will be continued to be reported on my credit report (instead of saying 'discharge to bankruptcy') and it will help to rebuild my credit.
Now it's that 60 day count down!

[Tater]

Livingdream,

I am the original poster of the thread that you were directed to. As it relates to your home, the bk Code does not require you to act on your intention to keep the home by signing a reaffirmation agreement. If you remain current on the mortgage you can keep the home and all the advantages that go along with it such as building equity and taking a tax deduction for interest. The only thing you lose, as far as I can tell, is the lender potentially reporting your payments on your credit report.

However, if you take the extra step and officially reaffirm, the possibility that payments will be reported is not the only thing that can happen. Florida, if I am not mistaken DOES NOT have an anti deficiency statute. If you officially reaffirm you are re-obligating yourself to the loan. You are removing the protection of the bk discharge. If you default, the lender will foreclose and have the added benefit of a right to sue you for whatever it does not recover from the foreclosure.

You say now that you can handle the payment. That is fine. But, like the person from Michigan who prompted me to begin the thread about why reaffirming is a bad idea, you may find out the hard way that re-obligating yourself to the loan was a big mistake.

You simply need to weigh the risks and the benefits. My job, as an attny, is to try to protect my client from future risk and, even though I live in a State with an anti deficiency statue, to this day I tell my clients “do not reaffirm”, just “stay and pay”. Your attny sees things differently and that is fine. You will eventually do what you feel comfortable with.

Now, the vehicle is a different beast. The Code requires you to act on your intention as it relates to such items. Certain jurisdictions have found ways around the requirement to reaffirm, including mine. I do not know if the Judges in Florida have jumped on the “reaffirming is a no-no as long as you are current” bandwagon. If they haven’t there may be no way to protect yourself from the trap that Congress and the credit industry created.

Des.

Des,

Great advice again! Our attorney is adamant about us not reaffirming our mortgage. Like you said, something could happen in the future and we would be stuck with a payment we can't afford. We have been current on our mortgage and she says that is a good thing. We have talked briefly on our own car loan and reaffirmation. I am going to bring it up more in our petition appointment. She said the only benefit to reaffirmation on a car loan is if she can get a lower interest rate. I am going to ask her if it is required in our district to reaffirm. We do have a twelve year old vehicle and we owe a good amount on. She is going to do a redemption on that so we can buy it outright for cash.

To the OP, please take the time to read the thread about not reaffirming your mortgage. I read it before we found our attorney. I was able to ask informative questions regarding this and how it pertains to our situation. She agreed with us and stated you don't want your home to own you. We don't plan on leaving our home anytime soon. If something happens in the future, like another job loss, then we aren't stuck with a mortgage payment we can't afford. Believe me, it is worth the read and the people on this forum only have your best interest at heart! Keep us updated !

[AngelinaCat]

Here is the thread that that keepsmiling is referring to:

http://www.bkforum.com/showthread.ph...rming+bad+idea

Please read it first before making any decisions. Also, I regret the one poster hijacking the majority of this thread. I trust that it is back on track.

Thanks

[despritfreya]

Livingdream,

I am the original poster of the thread that you were directed to. As it relates to your home, the bk Code does not require you to act on your intention to keep the home by signing a reaffirmation agreement. If you remain current on the mortgage you can keep the home and all the advantages that go along with it such as building equity and taking a tax deduction for interest. The only thing you lose, as far as I can tell, is the lender potentially reporting your payments on your credit report.

However, if you take the extra step and officially reaffirm, the possibility that payments will be reported is not the only thing that can happen. Florida, if I am not mistaken DOES NOT have an anti deficiency statute. If you officially reaffirm you are re-obligating yourself to the loan. You are removing the protection of the bk discharge. If you default, the lender will foreclose and have the added benefit of a right to sue you for whatever it does not recover from the foreclosure.

You say now that you can handle the payment. That is fine. But, like the person from Michigan who prompted me to begin the thread about why reaffirming is a bad idea, you may find out the hard way that re-obligating yourself to the loan was a big mistake.

You simply need to weigh the risks and the benefits. My job, as an attny, is to try to protect my client from future risk and, even though I live in a State with an anti deficiency statue, to this day I tell my clients “do not reaffirm”, just “stay and pay”. Your attny sees things differently and that is fine. You will eventually do what you feel comfortable with.

Now, the vehicle is a different beast. The Code requires you to act on your intention as it relates to such items. Certain jurisdictions have found ways around the requirement to reaffirm, including mine. I do not know if the Judges in Florida have jumped on the “reaffirming is a no-no as long as you are current” bandwagon. If they haven’t there may be no way to protect yourself from the trap that Congress and the credit industry created.

Des.

[keepsmiling]

; ) No, AngelinaCat, I don't live in that particular town. So, I guess I need to understand the reasoning behind everyone telling me NOT to reafirm. We have a house payment that is similar to a rent payment we would have to make if we didn't live here. With filing bk we wouldn't be buying another house for some time. The car payment is low, with a 1.9% interest. With all the credit card debt erased, I should comfortably be able to make both of those payments. I am in nursing and as of yet, have never had difficulty working. The problem here is that as nurses, we are terribly underpaid in northern Florida in comparison to every other state in the US.
So by not reafirming, we would have to give up the house and the car, isn't that correct? What would be an advantage to that?
I really appreciate everyone's input and have read through multiple posts. So, I really am listening. Maybe just not understanding?

Did you read the thread that AC mentioned on Page 1 of this discussion? That should help clear things up a bit.

[NoMoreCards]

Nobody is saying to give up your house or car. If you keep paying, nothing changes. If you ever do not pay, they foreclose. The only real difference is if you ever stop paying and get foreclosed on, they cant come after you for the debt. Learn more, you clearly are not inderstanding your options.

[df04527]

You just keep making the payments as you normally would. They will not reposses or foreclose as long as your paying...hence the pay and stay phrase. It IS the best of both worlds and i can't agree more DO NOT REAFFIRM.

If something happens down the road, like life, you CAN stop making payments and walk away free of the debt.

[livingdream]

; ) No, AngelinaCat, I don't live in that particular town. So, I guess I need to understand the reasoning behind everyone telling me NOT to reafirm. We have a house payment that is similar to a rent payment we would have to make if we didn't live here. With filing bk we wouldn't be buying another house for some time. The car payment is low, with a 1.9% interest. With all the credit card debt erased, I should comfortably be able to make both of those payments. I am in nursing and as of yet, have never had difficulty working. The problem here is that as nurses, we are terribly underpaid in northern Florida in comparison to every other state in the US.
So by not reafirming, we would have to give up the house and the car, isn't that correct? What would be an advantage to that?
I really appreciate everyone's input and have read through multiple posts. So, I really am listening. Maybe just not understanding?

[anderson238]

house-NO Reaffirm, Car- reaffirm if you know 100% that you can make this payment to complete the loan terms
I am currently in my 60 days waiting for discharge, I contiuned to pay my car note through my bank's bill pay using the same account# provided, I am not gettting statments, but know the due date and amount and click send every month.
i was also concerned, but called the bank and payments are posting.

[LadyInTheRed]

I'm just saying that each time I've asked an attorney about something I've seen here I'm getting a different answer.

That doesn't mean the information here is inaccurate. As AC points out, when you get the same answer from several long time members of this board and nobody posts to disagree, you are probably getting good information. But, you can take it or leave it.

Let's let this thread go back to it's original topic. If you want more input on your question, please start a new thread.

[ksgirl38]

"You HAVEN'T found a lot of accurate info on this website so far"--excuse me?

You have 91 posts to date, and many other members--with hundreds more posts, including myself--have been telling you essentially the same information, and it's not accurate?

Yes, maybe it is different in Kansas, but Dorothy, you aren't in Kansas anymore. The BK code is Federal Law, and applies nationwide. The State laws regarding exemptions and such rule in the States, and the 'Rules of the Local Court' also rule in your district, but essentially the Federal Law applies.

You are free to accept or ignore the advice given here--which is given learned from the School of Hard Knocks, and honest concern for a potential filer's well-being.

I'm just saying that each time I've asked an attorney about something I've seen here I'm getting a different answer.

[AngelinaCat]

I'm just asking because maybe it's different in Kansas. I haven't found a lot of accurate info on this website so far. Just wondering if there's any way around reaffirming it.

"You HAVEN'T found a lot of accurate info on this website so far"--excuse me?

You have 91 posts to date, and many other members--with hundreds more posts, including myself--have been telling you essentially the same information, and it's not accurate?

Yes, maybe it is different in Kansas, but Dorothy, you aren't in Kansas anymore. The BK code is Federal Law, and applies nationwide. The State laws regarding exemptions and such rule in the States, and the 'Rules of the Local Court' also rule in your district, but essentially the Federal Law applies.

You are free to accept or ignore the advice given here--which is given learned from the School of Hard Knocks, and honest concern for a potential filer's well-being.

[ksgirl38]

That may be so. However, we were told that we had to list everything, including the 2004 VW Jetta, that we still owed money for; my 1993 Pontiac GrandAmSE (free and clear-value perhaps $300.); and the 1968 Chevy Impala, that had been sitting on blocks for four years. Our $1,000.00 exemption allowed for vehicles in Florida, covered my GrandAm, and the Chevy. But we still had to list them.

At the 341, the trustee asked about the Chevy: "On a scale from 'Show Room Quality' to 'housing squirrels', which is it?" I answered truthfully that it was a bit better than 'housing squirrels', but that it had been on blocks in the garage for more than four years, and the green color was mold, not paint."

The trustee formally 'Abandoned Interest' in the vehicles as being "fully encumbered"--the mortgage on the Jetta; "wholly exempt"--both the GrandAm and Chevy; and "too old to be worth anything"--both the GrandAm and Chevy.

My point here is that you must list the vehicle in the proper spot in your paperwork along with the appropriate exemption, and let the BK process work. If you don't, you and your attorney are not being honest (worst case), or slipshod (best case).

I know you won't like this answer, but 'Hub and I suffered through many of our own inept attorney' mistakes/bad advice, and ended up paying about triple what we should have, had we been better prepared. We stay here and attempt to help new filers, such as yourself, to not make the mistakes we did.

I really hope the best for you.

I'm just asking because maybe it's different in Kansas. I haven't found a lot of accurate info on this website so far. Just wondering if there's any way around reaffirming it.

[AngelinaCat]

My car falls under an exemption in Kansas. I very distinctly remember one attorney telling me I didn't have to include it and the last guy I saw didn't seem concerned about it either.

That may be so. However, we were told that we had to list everything, including the 2004 VW Jetta, that we still owed money for; my 1993 Pontiac GrandAmSE (free and clear-value perhaps $300.); and the 1968 Chevy Impala, that had been sitting on blocks for four years. Our $1,000.00 exemption allowed for vehicles in Florida, covered my GrandAm, and the Chevy. But we still had to list them.

At the 341, the trustee asked about the Chevy: "On a scale from 'Show Room Quality' to 'housing squirrels', which is it?" I answered truthfully that it was a bit better than 'housing squirrels', but that it had been on blocks in the garage for more than four years, and the green color was mold, not paint."

The trustee formally 'Abandoned Interest' in the vehicles as being "fully encumbered"--the mortgage on the Jetta; "wholly exempt"--both the GrandAm and Chevy; and "too old to be worth anything"--both the GrandAm and Chevy.

My point here is that you must list the vehicle in the proper spot in your paperwork along with the appropriate exemption, and let the BK process work. If you don't, you and your attorney are not being honest (worst case), or slipshod (best case).

I know you won't like this answer, but 'Hub and I suffered through many of our own inept attorney' mistakes/bad advice, and ended up paying about triple what we should have, had we been better prepared. We stay here and attempt to help new filers, such as yourself, to not make the mistakes we did.

I really hope the best for you.