Posted on: 18th Feb, 2009 01:27 pm
Life after bankruptcy discharge - worried about keeping home...We filed bankruptcy in late 2005. Discharge was in 2006. Right before the filing of the bankruptcy, we re-financed our home mortgage to an interest-only 5-1 arm so that we could afford the mortgage payment. (at that time, husband was unemployed).
Now, 5 yrs is getting close. Home value is below the mortgage loan. When looking at credit, the home mortgage was discharged. If we get to the point where we can't pay the mortgage (after the 5 yrs are up) how does the process work, since it's already discharged? Still goes to foreclosure? Is that yet another black mark on our credit, even though it's already been marked negatively with the bankruptcy? And the home loan is listed as a negative mark being discharged. Did trying to keep our home at the time of the bankruptcy end up being a mistake and, ultimately being a second negative if we can't re-finance or sell the house or make the house payments after the bankruptcy, but 5 yrs later?
Very confused on how the situation stands and what our options are in the future...
House very hard to sell. right before bankruptcy, we had it on market for about one yr. it is a two story in a town tin Nevada hat seems to draw retirees. They don't even want to look at 2 story homes.
Any suggestions would be greatly appreciated. Don't know where to turn, and getting very worried.
Now, 5 yrs is getting close. Home value is below the mortgage loan. When looking at credit, the home mortgage was discharged. If we get to the point where we can't pay the mortgage (after the 5 yrs are up) how does the process work, since it's already discharged? Still goes to foreclosure? Is that yet another black mark on our credit, even though it's already been marked negatively with the bankruptcy? And the home loan is listed as a negative mark being discharged. Did trying to keep our home at the time of the bankruptcy end up being a mistake and, ultimately being a second negative if we can't re-finance or sell the house or make the house payments after the bankruptcy, but 5 yrs later?
Very confused on how the situation stands and what our options are in the future...
House very hard to sell. right before bankruptcy, we had it on market for about one yr. it is a two story in a town tin Nevada hat seems to draw retirees. They don't even want to look at 2 story homes.
Any suggestions would be greatly appreciated. Don't know where to turn, and getting very worried.
Welcome Mike,
If you walkaway from the property or stop paying the mortgage dues, your bankruptcy case will get dismissed. The court will check out if you qualify for Chapter 7 or not. If you qualify for a Chapter 7 bankruptcy, then it would be converted into that. If you do not qualify, then your bankruptcy filing will get dismissed and the lender will foreclose it and try to recover his dues. You will also become liable for the deficient amount resulting from the foreclosure sale.
If you walkaway from the property or stop paying the mortgage dues, your bankruptcy case will get dismissed. The court will check out if you qualify for Chapter 7 or not. If you qualify for a Chapter 7 bankruptcy, then it would be converted into that. If you do not qualify, then your bankruptcy filing will get dismissed and the lender will foreclose it and try to recover his dues. You will also become liable for the deficient amount resulting from the foreclosure sale.
Filed Chapter 7 in July 2008 discharged in October 2008 Finished paying trustee for assets in Aug 2009. Both first and second mortgages were discharged in the chapter 7. I received a notice that sherif sale will be on 12/10/2009 which in my state will give us about 6 months after that to vacate. I have heard that if I start making payments on the first mortgage only and lender takes pmt that will allow us to keep the home and the 2nd mortgage will not foreclose or ask for payment since it was discharged -even though both mortgages are with the same bank?- Is this correct please help.
If you regularly pay off the mortgage dues, then the lender will not foreclose the property and will allow you to stay in the property. However, your payments will not be reported to the credit bureau. Thus, you would be making payments but your credit will not get improved. If you want to save the property and pay off the dues, then it's better to reopen the bankruptcy and reaffirm the mortgage. As far as the second loan is concerned, the lender will still hold the lien on the property. You should check out whether or not it's written in your bankruptcy discharge documents that the second lender will not be able to sue you for the debts.
what if i stop paying my mortgage after my bankruptcy will they try to make a deal with us or just foreclose
Hi poopo,
The lender would simply foreclose the property if you stop your mortgage payments after bankruptcy. I don't think they would make a deal with you.
Thanks
The lender would simply foreclose the property if you stop your mortgage payments after bankruptcy. I don't think they would make a deal with you.
Thanks
Boy you got a bunch of bad advice. i know this is old and i hope resolved. if you included the house in bankruptcy and did not reaffirm, if the house forecloses, it does not AFFECT your credit score. It was already included in bankruptcy and you are and cannot be held liable for any deficiency.
Filed for bankruptcy 2 years ago, lawyer didnt reaffirm my mortgage or 2nd mortgage like I wanted him to. On my credit report it shows the mortgages were in the bankruptcy. I have been paying them both on time for the last 2 years thinking this would help my credit score. Neither is reporting. How can I get my mortgage company to start reporting good things? This is my only credit, can I do something to get it reported
Welcome Guest,
As you haven't reaffirmed the debts, the lender is not obligated to report the payments to the credit bureau. This is because you are not personally liable for the debts. You can contact the lender and negotiate with him so that he reports your payments to the credit bureau.
As you haven't reaffirmed the debts, the lender is not obligated to report the payments to the credit bureau. This is because you are not personally liable for the debts. You can contact the lender and negotiate with him so that he reports your payments to the credit bureau.
I filed chapter 7 bk to relieve our credit card dept. The house was not included but we did not reaffirm with the mortgage company. As long as we keep current on our loan can they foreclose on us and will we keep our house until it is paid in full?
i think you should speak to your lawyer who helped you to file the bankruptcy. if ur saying that there is no forecloser on your home then.how to reaffirmed it .or any good plan which can help you to keep your home and how u can protect the credit score.
regards
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aby
regards
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aby
when you file a bk, the personal liability goes away, that is you are no longer personally liable for the note(s) you signed. this is true for all the debt you had at the time of the bk.
understand, all of your debts, whether you intended to keep paying or not, are included in the bankruptcy, nothing is left out.
now your mortgages, the mortgagor still has the lien on the property, both your first and second. the question is whether the mortgagor has the right to foreclose. in ca a mortgagor can only foreclose pursuant to the deed of trust, which requires that you are in default of the deed before then can begin a non-judicial foreclosure.
in order to refinance, you would have to satisfy both liens, as the your chapter 7 did not void the liens on your property.
if the house is foreclosed, you do not have any personal liability, as you received a discharge of the debt.
reaffirmation of mortgages is generally not a good idea, and any attorney worth his salt would not sign off on a reaff. a reaff allows the creditor to retain the right to sue you, so depending on your state's law, so may mortgagor, particularly non-purchase money mortgages. as such, reaffirming such a large debt can become problematic if you were to default and you were to get sued.
understand, all of your debts, whether you intended to keep paying or not, are included in the bankruptcy, nothing is left out.
now your mortgages, the mortgagor still has the lien on the property, both your first and second. the question is whether the mortgagor has the right to foreclose. in ca a mortgagor can only foreclose pursuant to the deed of trust, which requires that you are in default of the deed before then can begin a non-judicial foreclosure.
in order to refinance, you would have to satisfy both liens, as the your chapter 7 did not void the liens on your property.
if the house is foreclosed, you do not have any personal liability, as you received a discharge of the debt.
reaffirmation of mortgages is generally not a good idea, and any attorney worth his salt would not sign off on a reaff. a reaff allows the creditor to retain the right to sue you, so depending on your state's law, so may mortgagor, particularly non-purchase money mortgages. as such, reaffirming such a large debt can become problematic if you were to default and you were to get sued.
If the mortgage company does do a foreclosure and you've never signed an affirmation, can that mortgage company report the foreclosure to the credit bureau's?
Hi Cinda,
As far as I know, the mortgage lender can report the foreclosure to the credit bureaus but it won't be able to come after you for the deficient amount.
Take care.
As far as I know, the mortgage lender can report the foreclosure to the credit bureaus but it won't be able to come after you for the deficient amount.
Take care.
I did my 4 home loan modification for 10 months already but I still not get approve yet and I just filed chapter 7 a month ago and I surrender 3 houses and try to need one, and this house I behind 2 months mortgage payments already and I don't have enough for this month. Is my lender foreclosure my home after my bk discharge? would you please give me suggestion? thanks
Welcome chan,
If your reaffirm your mortgage while you are in bankruptcy and keep on making payments, then the lender will not foreclose the property. However, if you do not pay the dues, then the lender will have the rights to foreclose the home.
If your reaffirm your mortgage while you are in bankruptcy and keep on making payments, then the lender will not foreclose the property. However, if you do not pay the dues, then the lender will have the rights to foreclose the home.