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GoLaw, Attorney
Category: Bankruptcy Law
Satisfied Customers: 753
Experience:  Attorney who worked for Chapter 11 and 7 trustee.
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My husband and I filed chapter 7 in 2007. We did not reaffirm

Customer Question

My husband and I filed chapter 7 in 2007. We did not reaffirm our home. After the discharge we tried to make mortgage payments and the bank would not accept (they also wouldn't accept payment while the bk was going on). Contacted the bank and was told we have past due payments and fees thata need to be taken care of or they will foreclose on the home. The bank said that they would roll the fees and late payments into our current mortgage and that we would have to sign a modification agreement. We signed the agreement. I'm not sure if we are now responsible for the mortgage that was discharged. It's not reporting on our credit. Can someone help.
Submitted: 7 years ago.
Category: Bankruptcy Law
Expert:  Terry L. replied 7 years ago.
If you did not sign a reaffirmation agreement, then the debt is discharged in your case and you are no longer required to make payments. if you do not work something out with the lender, yes, they can foreclose to transfer the title back to them. If you want to keep the property, you need to work out a loan modification with the lender, refinance etc. But at this point, you are not required to, and the debt is discharged.
Customer: replied 7 years ago.

We did sign a loan modification to roll the late payments and fees into the loan. Would that be considered reaffirmation and make us responsible for the loan. We didn't do a refi, so confusing...




Expert:  GoLaw replied 7 years ago.
Thank you for using Just Answer. From what you describe, it sounds like the mortgage was discharged in the bankruptcy. This means that you are no longer responsible for it. It does not mean, however, that the mortgage holder cannot foreclose on the property. If the lender does foreclose and the property is sold for less than the loan, the lender cannot seek a deficiency judgment against you.
Customer: replied 7 years ago.

So we wouldn't be responsible for the loan even after signing the loan modification?