Explain reaffirming vs no to me

[confusedinok]

We had our initial consultation with the attorney this morning. It went well and she says it looks pretty cut and dried as a no asset ch7. We would like to keep the house, but she recommends not reaffirming. She said if we keep making the payments, they won't do anything about it.

I guess I was under the assumption that we had to reaffirm to be able to keep the house. What am I not understanding?

[NoMoreCards]

Reaffirming basically makes it as if you never filed for BK. Meaning, if for whatever reason you can not make the house payment, the bank can foreclose, sell and then sue you for the remaining balance. Not a wise move. If you are filing BK, you get a much better option of retain and pay.

You pay your mortgage monthly, just as you do now and everything continues just as it always has. You pay off the house, you own it. You decide to sell it, then you pay the mortgage off and keep the remainder (assuming there is one). HOWEVER, if your circumstances ever change and you can not make the payments the lender will still foreclose, but they CAN NOT sue you for the outstanding balance of your mortgage.

Trust your attorney, sounds like great advice to not reaffirm.

[confusedinok]

Ok. I thought if we didn't reaffirm, we would lose the house too. That makes sense. Will the mortgage company do anything differently if we don't reaffirm? Do we need to let them know that we still want to make the payments or do we just keep making them?

Boy, all these things I never thought I'd ever have to think about!

[debee]

If you are paying your mortgage online, you will probably lose that option once you file. You'll need to find out where to send your payments.

Most mortgage companies won't report your timely payments to the credit bureaus so you lose that benefit.

When you file, you will be indicating on a Statement of Intentions what you intend to do with all your secured assets. The bank will find out that way.

There's a long thread in the Chapter 7 section of the forum all about reaffirmations. It was started a by an attorney (despritfreya) and is a discussion of different aspects of reaffirmation. http://www.bkforum.com/showthread.ph...-very-bad-idea.