REAFFIRMING DEBTS IN A CHAPTER 7 BANKRUPTCY

Question: What is the quickest and easiest way to get documentation that the mortgage is reaffirmed? My mortgage was in a Chapter 7 and discharged 3 years ago. I never stopped making payments while in the BK. I am looking to refinance into a much lower rate but the new lender wants documentation the mortgage is reaffirmed. Everything else has been signed off by the underwriter but this.

RESPONSE:

Your mortgage lender is asking for something that probably does not exist. Section 524 of the Bankruptcy Code allows for a loan to be reaffirmed, but, it is rare that a Bankruptcy Court will approve a reaffirmation agreement for a mortgage loan. The balance is so large that it is seldom in your best interest to reaffirm a mortgage loan debt.

The discharge that you received made it so that if you failed to pay the mortgage payments, then the lender could not come against you personally for any amounts owed that were not recovered from the sale of the property.

You need to contact the attorney who represented you in the bankruptcy case to confirm that no reaffirmation was granted on this debt.

About Nathan Davis, Esquire

Born in Charleston, South Carolina, Nathan Davis has been practicing law for many years. Mr. Davis has a wide variety of experiences having practiced domestic relations, criminal law, social security law having also practiced collection law in the past. This knowledge is helpful when someone needs to restart their financial life. The practice is now primarily bankruptcy and debtor representation work, but, Mr. Davis continues to also practice real estate law, trusts and estates and a general litigation practice. I believe that the most important part of representation is trying to leave you better off when the case is finished than when you started. Although I will do as my client directs, I will always tell you if I think that you are making a mistake. Bankruptcy is about a "fresh start". If you do not make changes in what you are doing, you will be doing what you are doing now in the future. There is no shame in bankruptcy or other steps that you may take to start your life over. Too often, people worry more about things than about themselves, their family or their future.
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