How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask cfortunato Your Own Question
cfortunato
cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
14232603
Type Your Bankruptcy Law Question Here...
cfortunato is online now
A new question is answered every 9 seconds

I am filing chapter 7, reaffirming my mortgage with no recourse,

Customer Question

I am filing chapter 7, reaffirming my mortgage with no recourse, but am 2 months behind. Will be three months behind by time of 341 hearing. What happens if the court allows the chapter 7, then I default on my mortgage because we don't agree on a modification? Will I be in trouble with bankruptcy court?
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 5 years ago.

Hi JACustomer,

Why did you say you would be re-affirming "with no recourse"? In general, re-affirming a mortgage means if the debtor stops paying, the mortgage company can get a deficiency judgment for the balance of the mortgage. Otherwise, there would be no point in re-affirming.

Customer: replied 5 years ago.
Because that is what my attorney told me we were doing. (?) Will the trustee allow my chapter 7 filing?
Expert:  cfortunato replied 5 years ago.

Yes - the trustee will allow the Chapter 7 if you are not paying the mortgage. Many Bankruptcy filers are not paying their mortgage.

 

I think this is what you wanted to know. If not, please let me know.

Thank you.

Customer: replied 5 years ago.
Well, I wanted to know a little more than that. The mortgage payment is part of my listed expenses. If I end up defaulting on my mortgage and end up in foreclosure because the mortgage company and I do not agree on the modification -- will a discharge be denied or revoked -- and will it be considered "abuse" of any sort.
Expert:  cfortunato replied 5 years ago.

If you re-affirm your mortgage, it will not be discharged - whether or not you continue to pay the mortgage, and whether or not you get a modification. Re-affirmation means the debt survives a Bankruptcy as if there had been no Bankruptcy. However, defaulting on the mortgage will not affect the discharge of your other debts.

Not paying the mortgage and eventually having a foreclosure will not be seen as an abuse of the system.

Customer: replied 5 years ago.
Even though the mortgage payment is listed as an expense to qualify for chapter 7 under the means test?
Expert:  cfortunato replied 5 years ago.

Was your household income more than the median, so that you had to fill out the rest of the Means Test beyond line 15?

If so, was there an amount listed on line 21?

Customer: replied 5 years ago.
Yes it was -- -343 (negative 343.00)
Expert:  cfortunato replied 5 years ago.

I will opt out of this question so that someone else can help you further.

Customer: replied 5 years ago.

Is anyone going to answer after my last entry?

 

Expert:  cfortunato replied 5 years ago.

Your question is available for any other Bankruptcy Law expert to answer.