Thank you for giving me the opportunity to assist you. I encourage you to ask me for clarification, if you are not clear with my Answer.
My husband and I filed chapter 7 we did note re-affirm on the house and we thought since we were making payments that it would show that we are still making payments on time on our credit report, since thats not the case we decided to walk away our house was dicharge and the credit report reads $0balance, incuded in bankruptcy now since were walking away can the also treat it as a forclosure and add it to our credit along with a BK? STRESSED AND CONFUSE will it double dipp?
Response 1: It is not likely for the foreclosure to show on your credit report if the foreclosure did not happen before your bankruptcy filing. Your credit report would show that that debt has been discharged through bankruptcy. However, the lender may decide to update the credit report to show that the house has been foreclosed. Again, this is very unlikely especially if you did not reaffirm the mortgage. When you do not reaffirm the debt, the lender generally stop reporting the debt to the credit reporting bureaus.
and can the bank forclose right away and what steps do the take to start.
Response 2: The bank has to give notice to anyone with interest on the property before the foreclosure happens. If your bankruptcy case has not closed, the bank would have to file a motion for relief from the automatic stay from the bankruptcy court in order to proceed with the foreclosure. If you do not respond to the motion from relief from the automatic stay, which you cannot respond at this time because you have already surrendered the property in your bankruptcy case, the Court would grant the lender's request for relief from the automatic stay after the expiration of time for responding to motion, which would be given on the Notice that you receive from the lender.
Once the foreclosure sale has occurred, you do not have to move out right away. The lender has to institute eviction proceedings in order to remove you from the premises. This may buy you another month in the house.
called the bank they told us to re-affirm but no gauratees
Response 3: DO NO REAFFIRM THE MORTGAGE in order to have your payments reported on your credit file. It is not worth the risk. Reaffirmation nullifies the benefits of your bankruptcy. This means that if you quit making payments, the lender would foreclose on the house and still come after you for the deficiency after the foreclosure sale. On the other hand, if you do not reaffirm, your personal liability on the NOTE is discharged in your bankruptcy so that the lender can NEVER come after you for the deficiency after a foreclosure sale if you stop making payments on the house.
Edited by AttorneyPhillips on 5/8/2010 at 5:32 AM EST