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TJ, Esq.
TJ, Esq., Attorney
Category: Bankruptcy Law
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Experience:  JD, MBA
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18 months ago I files chapter 7 and it was discharged Dec 2008.

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18 months ago I files chapter 7 and it was discharged Dec 2008. My mortgage company refused to reaffirm my first and 2nd because I didn't use an attorney. I am Still in my home and Paying my mortgage (even though they no longer report it to the credit burrows) on time but things have gotten tighter with the economy and I'm affraid of falling behind. The Home is about 85k under water. I have contact my mortage company to try and have my rate locked in (its adjustable) but they are non responsive. My question is can I reopen My Chapter 7 and have the courts force a readjustment or cram down or is it to late. Thanks, Pat

Hello and thank you for allowing me the opportunity to assist you.

Question: “My question is can I reopen My Chapter 7 and have the courts force a readjustment or cram down or is it to late.”

Answer: If the mortgages were not reaffirmed, then I assume they were discharged, correct? That’s called a ride-through, and it occurs when the underlying debt is discharged, but the security interest remains. In other words, you are no longer personally responsible for the mortgage, but if you don’t pay, then the lender can still foreclose because the lien was left intact. The good news is that if the mortgage payments are too high, you can simply walk away from the house without any further liability. A ride-through is generally favorable to a reaffirmation, unless you’re facing a situation where the lender wants you out despite the fact that you’re paying your mortgage (in which case a reaffirmation would give you rights to remain, while a ride-through would not in some jurisdictions).

Of course, if you want to keep your house then the info above is not very helpful. If that’s the case, then you’ll want to do exactly what you’ve already tried … contact the lender and request more favorable terms. Reopening your case may be possible since judges have discretion to reopen a Chapter 7 in order to “administer assets, to accord relief to the debtor, or for other cause.” But I don’t think the bankruptcy court will be able to provide you with the relief you’re requesting since they are available in Chapter 13 cases rather than Chapter 7 cases. Again, continue to contact the lender and try to seek some sort of modification. To be honest, I’m surprised that the lender is non-responsive considering the fact that you’ve already been discharged. It’s lucky you’re still paying.

Have I satisfactorily addressed your concerns? If not, then please feel free to ask for clarification.

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DISCLAIMER: Please understand that the complexities of most legal problems cannot be adequately addressed in this setting, and that I am only licensed to practice law in the state of Maryland. Accordingly, you acknowledge (1) that we have not formed an attorney-client relationship, and (2) that my post is general information only and not specific legal advice.

Customer: replied 7 years ago.
Thank you for your input.
I know i'm in a good position regarding the house.
If I pay I stay if i don't i walk away without it hurting my credit further.
for the life of me I can't figure out why the mortgage company hasn't been willing to lock it my rate to avoid problems in the future.
but I guess thats why our Baking System is so Messed up.
Thanks Again,
Pat
This is just a guess, but I suspect you haven't heard from your lender because it is completely backed up with so many foreclosures, bankruptcies, etc., it just can't adequately keep up. Have you tried calling and asking to speak to their "workout" department? The workout department of a bank is the department that deals with these types of modifications. An ordinary mortgage officer won't be able to help. Also, if you've only called, I would write letters.

But as you mentioned, you're in a good position with the house because you can't be sued and your credit can't be negatively affected.

I truly wish you luck.

.

DISCLAIMER: Please understand that the complexities of most legal problems cannot be adequately addressed in this setting, and that I am only licensed to practice law in the state of Maryland. Accordingly, you acknowledge (1) that we have not formed an attorney-client relationship, and (2) that my post is general information only and not specific legal advice.

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