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Phillips Esq.
Phillips Esq., Attorney-at-Law
Category: Bankruptcy Law
Satisfied Customers: 12955
Experience:  B.A.; M.B.A.; J.D.
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Hello,I live in Florida. I filed a chapter 7 bankruptcy

Customer Question

Hello,
I live in Florida. I filed a chapter 7 bankruptcy on August 31st,2011. I stated from the beginning in my petition that I wanted to reaffirm my home because I can afford it and my problem was strictly credit card debt that was overwhelming when they increased minimum payments up to triple of what I was paying. I stated again in my 341 meeting I would reaffirm my home. An order for discharge and no distribution was entered on December 12th but my reaffirmation was not incuded!! Which was the most important thing for me. My attorney who is very good has an incompetant staff. I was hounding them since September 2nd when my home lender sent the request for a reaff (but we had to draft it). They finally drafted it and send it to the lender on November 22. I kept asking when was it going to sent back to us and the staff would say we need to way. Well, they took to damn long to file it and when I finally got in touch with my lender on December 20, they said there were three mistakes that needed modification. I rushed and called my attorney's office and told them. The mistakes were corrected and then it took to today to get it executed fully because my lender specialist said it takes long and that is why they believed we sent it way too late. Even though they did receive it in November I agree it was late but they also never did anything for 3 weeks because I had an inexperienced BK specialist who sat on it until I called her and she hustled but it was already after my discharge order. They refused to pre-date the signature as per my attorney's request so we can easily enter it before the case is closed. They refused to pre date it even though we sent it November 20th and it was signed by my attorney and me in November. So, my case is going to close any day now since the order for discharge was entered 3 weeks ago. Now, my attorney says our only option is to file a motion to VACATE DISCHARGE to allow reaffirmation to be entered and deemed valid and effective, and for Entry of Subsequent Discharge. This is so frustrating because I was the only one calling weekly about my reaffirmation and the only one who took matter into her own hands. My attorney blames them because they should not had sat on it for 3 weeks with no response, and the lender blames him for this taking so long. I am not at fault. My attorney wants to charge me $600 to do these new motions and believes the Judge we have will accept it but says he may deny it too so I'm out of the money at that point, aside from the fact I paid $250 for the reaffirmation already. My question is:
should I have to pay this $600 when they dropped the ball and never did any follow up, I really did all the hustle and Will Vacating the discharge be wise? Will this mess up my discharge? I have heard many different stories, and some say that they will concentrate only on the reaffirmation if the Judge does not decline motion and others say it can open a can of worms. Please help with your advise, I really need it and have to make a decision by Monday morning so we can beat the closing of the case any day now. My home is paramount to me and having my good payment history reported. I use to have an 820 Fico less than a year ago, I believe my mortgage payment will help be rebuild my credit faster and I can finally get statements again. But Im angry that I am the one paying for all this, literally. Let me know, I will wait. Madge. Thanks.
Submitted: 2 years ago.
Category: Bankruptcy Law
Expert:  Phillips Esq. replied 2 years ago.
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.




I have different take on this. You should NEVER sign a reaffirmation Agreement unless it is absolutely necessary. In most cases, Reaffirmation of a debt is not necessary. However, it is a ploy used by the creditor to get you to be responsible for a debt that you should been discharged in your bankruptcy. Reaffirmation Agreement is NEVER for the benefit of the debt. It nullifies the benefit of your Bankruptcy Discharge for that debt. This means down the road, if you become delinquent on your mortgage and your property is foreclosed, the lender can come after you for the deficiency after the foreclosure. Whereas, if you did not reaffirm the debt, the lender CANNOT come after you for the deficiency after the foreclosure sale because your personal obligation on the Note has been discharged in your bankruptcy.

The lender is the one that is responsible for preparing the Reaffirmation Agreement and not the bankruptcy Attorney. Once the Agreement is prepared, then the lender would send it to the bankruptcy Attorney to review and give you to sign it if the bankruptcy attorney thinks it would be in your interest. Also, the bankruptcy attorney must also sign it to indicate that reaffirmation would not cause undue hardship to you. There is a presumption of undue hardship if your expenses are more than your income. For most consumer cases, the debtors are in red--their expenses are more than their income. So, the bankruptcy attorneys in these cases are hesitant to sign the Reaffirmation Agreement.

So, I do not think it is your interest to have signed this Reaffirmation Agreement and thus you should not be trying so hard to get the Agreement approved by the Court. Also, since the Discharge Order has been issued, the Reaffirmation Agreement is not valid and you should consider it a blessing. For added security, you should also tell your attorney that you have changed your mind and to rescind the Agreement.

As long as you continue to make your payment, your property is not going to be foreclosed.

Finally, the lender cannot back date the form. That would fraudulent.

Whatever you do, DO NOT FILE A MOTION TO VACATE YOUR DISCHARGE ORDER SO THAT YOU CAN BE ON THE HOOK FOR A DEBT THAT HAS ALREADY BEEN WIPED OUT!THAT WOULD BE A DISASTROUS MISTAKE.

Customer: replied 2 years ago.
I need a little clarity. I know so many attorney's that say don't do reaff. But I wanted too because it was right for me. So, I am very familiar with all that entails. I will say this, My attorney has never had to draft a reaff in 23 years. Right now, it has been executed fully but not entered, so what do you mean by rescind the agreement. If he just doesnt file the motion to vacate discharge wouldn't that be enough. Do I HAVE to tell metlife I didn't file it? My attorney did offer that if I didn't file it, to leave it alone. Also, why do you believe I would be on the hook for debt that has been discharged? You mean all other creditors or the mortgage? Also the Lenders Attorney, filed a notice of appearence on my case so he can view my docs and get updates. I thought that was stupid when the timeline has passed for him to do that. Am I right? Will this notice hurt my closing of the case or will the courts disregard that.
Expert:  Phillips Esq. replied 2 years ago.
I need a little clarification myself.

Have you not filed the Reaffirmation Agreement with the Court?
Customer: replied 2 years ago.
No, as I stated in the first email/question box. My dilema was that my attorney was going to charge me 600 and " Now, my attorney says our only option is to file a motion to VACATE DISCHARGE to allow reaffirmation to be entered and deemed valid and effective, and for Entry of Subsequent Discharge. " I apologize but I am very detailed, are you reading all my information I provided?
Expert:  Phillips Esq. replied 2 years ago.

Thank you for the information:

No, as I stated in the first email/question box. My dilema was that my attorney was going to charge me 600 and " Now, my attorney says our only option is to file a motion to VACATE DISCHARGE to allow reaffirmation to be entered and deemed valid and effective, and for Entry of Subsequent Discharge. " I apologize but I am very detailed, are you reading all my information I provided?


Response 1: Yes, I am reading it. I must have misunderstood or misinterpreted what you wrote.

I need a little clarity. I know so many attorney's that say don't do reaff. But I wanted too because it was right for me. So, I am very familiar with all that entails. I will say this, My attorney has never had to draft a reaff in 23 years.


Response 2: Again, it is not the responsibility of the bankruptcy attorney to draft a Reaffirmation Agreement. The Agreement always comes from the lender.

Right now, it has been executed fully but not entered, so what do you mean by rescind the agreement. If he just doesnt file the motion to vacate discharge wouldn't that be enough.


Response 3: Since you have clarified this issue, there is no need to rescind. Yes, not filing the Motion to Vacate Discharge would take care of it. That is, leaving things as is would accomplish the task.

Do I HAVE to tell metlife I didn't file it? My attorney did offer that if I didn't file it, to leave it alone.

Response 4: Leave it alone. Reaffirmation Agreement is voluntary. You cannot be forced to sign it or file it with the Court.

Also, why do you believe I would be on the hook for debt that has been discharged? You mean all other creditors or the mortgage?


Response 5: If the Reaffirmation Agreement were filed with the Court on time and were approved by the Court, then it would have nullified the benefit of your Discharge for the Mortgage ONLY--for the reaffirmed debt, as previously discussed. This means that in case of foreclosure of the reaffirmed mortgage, the lender can come after you for the deficiency. Whereas, if the mortgage was not reaffirmed, the lender cannot come after for the deficiency after the foreclosure of the mortgage.

Also the Lenders Attorney, filed a notice of appearence on my case so he can view my docs and get updates. I thought that was stupid when the timeline has passed for him to do that. Am I right?


Response 6: No, you are not right. If the attorney has just been retained, then the attorney must file appearance regardless of the status of your case. Also, the lender's attorney can view your docs whether or not he or she filed an appearance in the case.

Will this notice hurt my closing of the case or will the courts disregard that.

Response 7: No. The Notice would not affect your case. Attorneys file Notice of Appearance all the time for variety of reasons. The Notice by itself is not going to affect the closing of your case. What is more important is your Discharge Order, which you have already received.

Customer: replied 2 years ago.

ok, when I asked I would be on the hook for the debt, I was referring to when you mentioned DO NOT FILE A MOTION TO VACATE YOUR DISCHARGE ORDER SO THAT YOU CAN BE ON THE HOOK FOR A DEBT THAT HAS ALREADY BEEN WIPED OUT!THAT WOULD BE A DISASTROUS MISTAKE.

I was not sure if you meant that would open a can of worms with the other discharged creditors or it would exclusively focus on the entering of the reaffirmation. In other words, when you vacate a discharge to enter the reaffirmation like I asked in my first request, does it solely focus on the reaffirmation or does it now put all the creditors back in play?

 

You never answered, if my attorney was in the right to ask for an additional 600 when I already paid 250 for the reaff and the took 3 months to send it, literally before my case was discharged. I do not think that is fair. They did take very long, they received the lenders request September 2nd and no one did anything for three months. I more worried about the motion to vacate than anything that is why I wanted full clarity on how that would impact the rest of the discharge. I firmly believe that for the right candidate reaffirming is the way to go. I have excellent payment history with them and it will never be reported. I plan to stay here another 5 years at least before selling. Now, when I go purchase new home, it will look horrible to prespective lenders that I included my home in the bankruptcy. I will never get statements to prove anything, just my checks to them. Lenders won't even ask for that because they won't get past my mortgage being written off. I understand reaffirming is not for everyone. If you can afford it or are unsure about your future, than NO you don't. But the benefits in my opinion when you reaffirm far outway the bad, because if your credit mean a lot like it does to me, having they report history is paramount. Also, I hate to be in limbo.

 

Yes, I did know the lenders attorney could view the documents regardless. I do it all the time, it's public record. I guess this is my last reply, I will wait for yours.

Expert:  Phillips Esq. replied 2 years ago.

 

ok, when I asked I would be on the hook for the debt, I was referring to when you mentioned DO NOT FILE A MOTION TO VACATE YOUR DISCHARGE ORDER SO THAT YOU CAN BE ON THE HOOK FOR A DEBT THAT HAS ALREADY BEEN WIPED OUT!THAT WOULD BE A DISASTROUS MISTAKE.

I was not sure if you meant that would open a can of worms with the other discharged creditors or it would exclusively focus on the entering of the reaffirmation. In other words, when you vacate a discharge to enter the reaffirmation like I asked in my first request, does it solely focus on the reaffirmation or does it now put all the creditors back in play?


Response 1: No, only the reaffirmed debt would be affected. All deadlines for objections are still the same. The creditors are supposed filed their objections to dischargeability of debts or to the bankruptcy case within 60 days of the conclusion of the Section 341 Meeting. Vacating the Discharge Order would not reinstate the already expired deadlines.


You never answered, if my attorney was in the right to ask for an additional 600 when I already paid 250 for the reaff and the took 3 months to send it, literally before my case was discharged. I do not think that is fair. They did take very long, they received the lenders request September 2nd and no one did anything for three months. I more worried about the motion to vacate than anything that is why I wanted full clarity on how that would impact the rest of the discharge. I firmly believe that for the right candidate reaffirming is the way to go. I have excellent payment history with them and it will never be reported. I plan to stay here another 5 years at least before selling. Now, when I go purchase new home, it will look horrible to prespective lenders that I included my home in the bankruptcy. I will never get statements to prove anything, just my checks to them. Lenders won't even ask for that because they won't get past my mortgage being written off. I understand reaffirming is not for everyone. If you can afford it or are unsure about your future, than NO you don't. But the benefits in my opinion when you reaffirm far outway the bad, because if your credit mean a lot like it does to me, having they report history is paramount. Also, I hate to be in limbo.


Response 2: I am trying to do the best that I can within the confines of this forum—your questions are numerous and I am trying to answer all of them the best that I can. So, bear with me.


No, the additional fee of $600.00 is not reasonable if the attorney was the reason for the delay. The attorney cannot charge you for his own mistakes.

Yes, I did know the lenders attorney could view the documents regardless. I do it all the time, it's public record. I guess this is my last reply, I will wait for yours.

Response 3: Okay

 

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