My lawyer FORGOTt to Mention!!!!

[kcdunlap24]

That even though my mortgage isn't include in my Chapter 7 my automatic payments would be discontinued. And all my students loans that have cosigners will revert to the co-signers....

Fortunately I picked up the mortgage issue immediately as I watch my checking like a hawk cause money is so tight.

But today I had to deal with a panicked stepfather after getting a letter from Sallie Mae...That was not a fun conversation.....He has perfect credit and was very upset. I would have liked to have warned him that it was going to happen but I had no idea....I've been paying on them since the beginning with no plans to stop but Ouch!!! the stress of the day!

[justbroke]

Your mortgage IS included in your Chapter 7. While you are now bewildered, I too am bewildered why an attorney (or debtor) would say that some debt was "not" included in a bankruptcy. All debt is included . The question is whether you "reaffirmed" the mortgage or not. If you didn't reaffirm, then your mortgage would actually be discharged as well! I don't know any attorneys -- and there may be -- that would recommend or approve (sign off on) a mortgage reaffirmation.

Not all attorneys know about how the student loan companies (NelNet, Sallie Mae) deal with bankruptcy, but all of the things you mention are well known. Automatic payments for everything will stop (due to the so-called "automatic stay"). Student loans go into deferment, but once you reach discharge you need to deal with them. (You actually need to keep paying your Student Loans during the bankruptcy to avoid default!)

Your father should not have panicked, because you would have told him you were filing before he was contacted by Sallie Mae.

I'm sorry that you are panicked today, but these things are quite normal and not all people pick up on these things. The attorney may have mentioned it but it may have been "your student loans will go into deferment" and "your mortgage lender will stop billing you".

[kcdunlap24]

Your mortgage IS included in your Chapter 7. While you are now bewildered, I too am bewildered why an attorney (or debtor) would say that some debt was "not" included in a bankruptcy. All debt is included . The question is whether you "reaffirmed" the mortgage or not. If you didn't reaffirm, then your mortgage would actually be discharged as well! I don't know any attorneys -- and there may be -- that would recommend or approve (sign off on) a mortgage reaffirmation.

Not all attorneys know about how the student loan companies (NelNet, Sallie Mae) deal with bankruptcy, but all of the things you mention are well known. Automatic payments for everything will stop (due to the so-called "automatic stay"). Student loans go into deferment, but once you reach discharge you need to deal with them. (You actually need to keep paying your Student Loans during the bankruptcy to avoid default!)

Your father should not have panicked, because you would have told him you were filing before he was contacted by Sallie Mae.

I'm sorry that you are panicked today, but these things are quite normal and not all people pick up on these things. The attorney may have mentioned it but it may have been "your student loans will go into deferment" and "your mortgage lender will stop billing you".

Thanks for your information. I thought the mortgage was not included and no I can't find the download of my case so I can't even check tonight. So, I'll have to talk with my lawyer tomorrow. I have no idea what reaffirming my mortgage means; so I guess I need to look that one up.

As far as the student loans when I spoke to my lawyer tonight he said that the loans will not be taken from my name which is the exact opposite from what my stepdad was told when he called Sallie Mae tonight. He was told that because of the bankruptcy filing the loan was now only in his name and no longer in mine and the he was required to make all the payments. I had filed for a deferment prior to filing bankruptcy which was approved but I now have absolutely no access to my Sallie Mae loans. I tried tonight and was given a phone number to call; so I'll do that tomorrow.

As far as automatic payments being stopped it may be common knowledge but I'm not sure how I was supposed to find this out. I was not notified by the mortgage company they just stopped taking the money out. And my lawyer did not say anything because I questioned him specifically about the loans being listed on the Chapter 7 filing and he just said they were included. Never mentioned about auto payments being stopped.

My Stepfather panicked because he has perfect credit but is dealing with an house that is underwater and will be losing a substantial amount of money. So, he is extremely sensitive to credit implications. He did not know about the bankruptcy prior to the phone letter he received from Sallie Mae today. Hence, another level to his panic.

Looks I have some more research to do tomorrow.

[kcdunlap24]

Ok found my paperwork. The mortgage is listed; so my error. I looked up Reaffirmation. We are doing a reaffirmation as we will continue to pay the mortgage after the bankruptcy. So, I understand all that now I think.

[IBroke]

I looked up Reaffirmation. We are doing a reaffirmation as we will continue to pay the mortgage after the bankruptcy. So, I understand all that now I think.

I'm not so sure on that one.

Not reaffirming does NOT mean that you won't be keeping your home or stop making payments. You can still make payments and stay in your home WITHOUT a reaffirmation. Not reaffirming simply means that your personal liability for the loan will be gone/discharged.

I highly recommend that you either google a bit more or - even better - ask your attorney to explain this topic to you.

[IBroke]

I don't know any attorneys -- and there may be -- that would recommend or approve (sign off on) a mortgage reaffirmation.

Hmm, justbroke, wasn't there this issue here in Florida that a lender could actually demand a reaffirmation if you want to keep the home? I recall a discussion we had before where we were talking about this scenario.

Since my mother is going to file shortly, I'm still curious about this. We are going to indicate on the paperwork that she intends to reaffirm, but I have no idea if a judge is going to approve a $550K mortgage-reaffirmation on a property with a current value of $340K in the first place. And if he/she doesn't, what's going to happen? Is the intention to reaffirm good enough to be "protected"?

I'm also concerned about the future. If - God forbid - something happens to my mother, I know for fact that I could take over my mother's mortgage due to this:

http://articles.chicagotribune.com/1...se-germain-law

Now, I would like to know if this law also applies if a mortgage is NOT reaffirmed. I assume that it does but I'm just not 100% sure on that. Many attorneys don't know much about this law (even des. was a bit surprised).

I assume this law is not bound to the personal liability aspect of a mortgage but more likely to the lien/note aspect so I think it shouldn't matter if a mortgage is reaffirmed or not in regards to this law. Any idea, justbroke?

We are really not keen on reaffirming but we simply don't want to risk anything. Call me crazy, but I'm just thinking ahead and about all the possible scenarios in order to make the right decision. If reaffirming is necessary to protect all the rights we currently have, we will try to do that. If a reaffirmation is not necessary to keep our home now and not required in order for me to take over the mortgage in case of an emergency, we will try to avoid it and hope the judge denies it.

[kcdunlap24]

I'm not so sure on that one.

Not reaffirming does NOT mean that you won't be keeping your home or stop making payments. You can still make payments and stay in your home WITHOUT a reaffirmation. Not reaffirming simply means that your personal liability for the loan will be gone/discharged.

I highly recommend that you either google a bit more or - even better - ask your attorney to explain this topic to you.

OK now I'm totally confused again. Do we WANT to reaffirm a mortgage or do we want not to reaffirm a mortgage?

I plan on calling my lawyer to talk about it but I'm just curious what the opinions are on the subject as I do not understand it.

[df04527]

kc, if you re-affirm a mortgage (a bk process by which a formal document is submitted to the court signed by both parties) then any time "down the road" if something happens, god forbid a job loss or worse and it necessitates the need for you to not have the ability to make mortgage payments dictated in the reaffirmation agreement, the bank can come after you.

If you don't reaffirm and do what is referred to as a ride-through or continue to pay your originally agreed upon mortgage (with no reaffirmation agreement filed) then if something happens you can walk away later if need be as the mortgage will be discharged in the BK.

The recommendation, on this forum, is to never reaffirm justincase. . Hope that helps, little bit of a thick subject when it comes to mortgages.

[kcdunlap24]

kc, if you re-affirm a mortgage (a bk process by which a formal document is submitted to the court signed by both parties) then any time "down the road" if something happens, god forbid a job loss or worse and it necessitates the need for you to not have the ability to make mortgage payments dictated in the reaffirmation agreement, the bank can come after you.

If you don't reaffirm and do what is referred to as a ride-through or continue to pay your originally agreed upon mortgage (with no reaffirmation agreement filed) then if something happens you can walk away later if need be as the mortgage will be discharged in the BK.

The recommendation, on this forum, is to never reaffirm justincase. . Hope that helps, little bit of a thick subject when it comes to mortgages.

Thanks that explains it better. I will call my lawyer later and find out exactly what we are doing as I have no idea.

[tobee43]

just an added note here: IF you atty did in fact reaffirm your mortgage i would immediately request an amendment to your petition.

if you want to keep the house fine, then just pay and stay after the lift has been removed. you may have the intention of really staying forever, which is fine, however, if life changes down the road with all this uncertainty, nowadays, its a reassuring thought that you could walk away from the house with no recourse for the bank. by reaffirming the mortgage, you now have or will no choice but to pay the bank no what happens. again, that may be your intention, and that's fine, it's just that again, life changes and you may need to make that choice down the road, you want the option....as kcdunlap explains as well.

[kcdunlap24]

just an added note here: IF you atty did in fact reaffirm your mortgage i would immediately request an amendment to your petition.

if you want to keep the house fine, then just pay and stay after the lift has been removed. you may have the intention of really staying forever, which is fine, however, if life changes down the road with all this uncertainty, nowadays, its a reassuring thought that you could walk away from the house with no recourse for the bank. by reaffirming the mortgage, you now have or will no choice but to pay the bank no what happens. again, that may be your intention, and that's fine, it's just that again, life changes and you may need to make that choice down the road, you want the option....as kcdunlap explains as well.

Quick question while I'm waiting for my atty office to open. If you don't reaffirm the mortgage can you sell the house later and profits are yours?

[Floridagail]

I have to defend the attorney, He has no way to know which creditors do what, when you file bankruptcy. Ours told us nothing either. My Car loan got closed , My bank Cu stopped my debit card, but allowed my account and loan account to stay open. Some banks actually close your account with out being in debt to them. So it is hard for them to keep up with what a creditor will do. We did advance plan our bkprty so we did lots of research. We still got surprizes.
As far as reaffirming your mortgage. Most attorneys do not recommend it. Just stay and pay.

[NoMoreCards]

Quick question while I'm waiting for my atty office to open. If you don't reaffirm the mortgage can you sell the house later and profits are yours?

Once the liens are paid, yes.

[tobee43]

most banks nowadays are allowing people to what is referred to as "pay and stay". let's say you never reaffirm and you stay for the next 5 years no problem. your name is and remains on the deed...it's still yours. you can sell it as long as it's enough to pay off the mortgage and any or all liens, again if any.

now, if you intend to stay and NOT pay, which many people do as well to save money for the move, the bank will eventually begin foreclosure proceedings against you. the length of time for the process would depend on whether you are in a judicial or non-judicial state. hence, you hear these stories.."oh my, they stayed in that house 3 years before the bank finally foreclosed"....that's an example of a judicial foreclosure process.

i don't want to add any confusion to your situation. however, the bottom line is you need choices, this is your shot to make certain whether you intend to pay and stay, sell in a few years, or leave at some point and stop paying the mortgage and that is what NOT reaffirming allows you to do, all of those options. whereas reaffirming you are committing yourself to continue as is with no way out without consequences.

[df04527]

I have to defend the attorney, He has no way to know which creditors do what, when you file bankruptcy. Ours told us nothing either. My Car loan got closed , My bank Cu stopped my debit card, but allowed my account and loan account to stay open. Some banks actually close your account with out being in debt to them. So it is hard for them to keep up with what a creditor will do. We did advance plan our bkprty so we did lots of research. We still got surprizes.
As far as reaffirming your mortgage. Most attorneys do not recommend it. Just stay and pay.

Certainly agree that an attorney can't possibly keep up with all the creditors however, I feel the attorney should have advised what "could" happen prefaced with they are not entirely certain.