Quick question about reaffirmed secured loans (home etc.) during Chapter 7

[syd74]

Hi -- we are keeping our home because TX allows us to do so, and we are not behind on payments for it. I assume that means we are reaffirming it. When we file, will our home loan freeze until the case is closed, or will we still be paying on it during the three months or so? If it does freeze, will interest keep accruing, or will it freeze completely?

Also, how hard is it to pay other bills, like utilities and cable? Is there any problem using bank bill pay as usual, as long as the bank doesn't freeze the checking account?

Thanks!

[LadyInTheRed]

Keeping your home doesn't mean you have to reaffirm the mortgage. Most people are better off not reaffirming.

You have to keep making your mortgage payments after you file Chap 7. If you don't, the mortgage company can file a motion for relief from automatic stay and start foreclosure. If you pay using the mortgage company's website, your access to that site may be revoked during your BK. If that happens, call the mortgage company to find out where to send payments.

You shouldn't have any trouble paying your utility and cable bills through your bank's bill pay. If you are late on any of those bills and a utility or cable company is included as a creditor in your BK, they may close the existing account and open a new one for post filing charges. They may also charge you a deposit to retain service. So, to avoid paying a deposit, stay current. Unless your checking account is at Wells Fargo or US Bank or at a credit union where you have secured loans, your account should not be frozen.

[syd74]

Thanks, LadyInTheRed! That was very informative.