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    Reaffirmation Question

    I understand the perils of reaffirming. I have a question out to my attorney, but I wanted to get the collective take here as well.

    What are the dangers of riding through, and staying current? Can the bank then change my interest rates or decide I have some balloon payment due to pay it off in full?
    Filed 3/16/11 via attorney who was worth every penny
    341 04/21/11
    DISCHARGED! 06/21/11

    #2
    Once you receive your discharge there is a permanent injunction that goes into effect preventing the creditor from ever trying to collect on the debt. So they can't start upping your monthly payment or forcing you to abide by the terms of a contract you didn't sign.

    However they still have a security interest and they are allowed to pursue that according to the terms of the original contract and state law. The state law part is important because I don't know of any states that allow lenders to foreclose when the homeowner is not in default. I know of at least one state that doesn't allow repo (even when the debtor didn't seek a reaffirmation) for cars so long as the debtor is current.

    In the case of cars, in most states they can repo the car if you don't reaffirm. Most lenders don't repo (Ford Motor Credit & most credit unions being exceptions to the contrary) because they rather have the monthly payment. You can find out what your lender's reaffirmation policy is by asking someone in their bk department. You can do this anonymously if you call from a number not registered to your account.

    I've never heard of a lender doing the things you describe in your post.
    There are two secrets for success in life:
    1.) Never tell everything you know.

    Comment


      #3
      Thank you very much! The car reaffirmation doesn't concern me too much. I almost have it paid for, and according to Blue Book, it is worth more than I oew.

      The mortgage reaffirmation kind of gives me pause. I am just trying to find out what, if any, bad things could happen to me if I didn't re-affirm the mortgage, and stayed current. I know that while I have the mortgage my interest rate and terms are locked in. I just wasn't sure what scenarios could happen if the mortgage was kind of null and void by BK.
      Filed 3/16/11 via attorney who was worth every penny
      341 04/21/11
      DISCHARGED! 06/21/11

      Comment


        #4
        Makes sense that you would wonder. It almost seems too good to be true that bk lets us sever the personal liability of the debt but still retain all the benefits of home ownership. It's a nice benefit.
        There are two secrets for success in life:
        1.) Never tell everything you know.

        Comment


          #5
          I have already signed the agreement, but my attorney has advised me to rescind it. I still have plenty of time to do so. It is not his fault that I signed. It is my fault that I misunderstood and thought that I had to reaffirm anything that was secured that I wanted to keep. I did not understand it was just the car required by law. And when he asked me if I understood, I told him I had researched it, and that yes, I wanted to do so.
          Last edited by overit; 04-27-2011, 07:34 PM.
          Filed 3/16/11 via attorney who was worth every penny
          341 04/21/11
          DISCHARGED! 06/21/11

          Comment


            #6
            Seems like you have a good attorney. So glad you discovered the truth in time!
            There are two secrets for success in life:
            1.) Never tell everything you know.

            Comment


              #7
              Me too. I mean, I want to hope that nothing is going to happen in the future that would cause me to fall behind. I am hoping that my Chapter 7 is going to make it possible for me to actually get ahead once things settle down.

              But you never know. I'm self employed, and things could get real ugly real quick. If I can't be "punished" for rescinding and staying current, or can't be foreclosed against faster if I fall behind, I don't see any sense in keeping the agreement in place.

              Thanks again for all your help! I sincerely mean that. This board has truly been a life saver for me. Even with my attorney, I figured that my case meant more to me than anyone else, so I've had a vested interest in educating myself as much as possible.
              Filed 3/16/11 via attorney who was worth every penny
              341 04/21/11
              DISCHARGED! 06/21/11

              Comment

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