Bankruptcy Law Questions? Ask a Bankruptcy Lawyer.
I'm sorry. Yes, it was a reaffirmation letter. It was sent to me from the attorney.
Thank you for the clarification: Hello again, I got an affirmation letter that we are supposed to sign. It's for our home that we have a mortgage on. What if my husband and I don't sign it? Will they come after our house? I'm leery about signing because it says if we default on the loan they could garnish our wages. I don't know what the future holds and you never know what can happen. I certainly don't want them garnishing our wages if we can't pay the mortgage for some reason. Please advise. Response: No, they would not come after the house so long as you continue to make your payments. It is worth noting that reaffirmation agreement is 100% voluntary. You do not have to sign it if you do not want to.
Reaffirmation is NEVER in the best interests of the debtor no matter how the creditor tries to sugarcoat it. Reaffirmation nullifies the benefits of bankruptcy protection for the reaffirmed debt. This means that if your mortgage were reaffirmed, you would still be liable for the mortgage if you can no longer afford to pay it down the road. The creditor would come after you for the deficiency after foreclosure. Once reaffirmed, you can NEVER list the debt in your future bankruptcy filing. On the other hand, if you do not reaffirm the mortgage, your personal obligation on the note is wiped out. This means that you are no longer liable for the mortgage. While you can continue to make mortgage payments in order to stay in the house, you no longer have legal obligation to pay the mortgage. Also and more importantly, if the creditor forecloses, the creditor can NEVER come after you for deficiency after the foreclosure sale because your personal obligation on the debt has been wiped out by your bankruptcy Discharge.
So what do you suggest? I'm thinking that the Lawyer sent it to me because he thinks I should reaffirm. Should I tell him I don't want to reaffirm or just ignore the document he sent me? How do you handle it with your clients? I know you can't tell me what to do. But if you could tell me what you do with your clients I would appreciate it.
So what do you suggest? Response 1: I cannot directly answer this question because as you know I am not supposed to be giving legal advice here. I'm thinking that the Lawyer sent it to me because he thinks I should reaffirm. Should I tell him I don't want to reaffirm or just ignore the document he sent me? Response 2: Actually, that is not the case. The Attorney has Professional obligation to forward the document to you as soon he receives it from the lender. The Attorney must also tell you what he thinks and suggests that you do in light of the serious consequences of reaffirmation. How do you handle it with your clients? I know you can't tell me what to do. But if you could tell me what you do with your clients I would appreciate it.
Response 3: I would tell my client not to sign it.
My Lawyer is completely useless and is why I can't sleep at night. I'm so afraid he is going to screw this whole thing up for us. I can't stop it now because our hearing is in about 3 weeks.
I'm not going to sign it. I think there might be an option on there to decline it anyway. I'm not sure. I will have read it again. Thank you so much. I have another question, but will ask you in a new thread.
So basically I can just keep paying the mortgage and when it's paid off, the house is mine? Or.... do I have to worry about them foreclosing on the house since I am going bankrupt and I didn't sign the reaffirmation agreement? Sorry, I'm asking for more clarification. This is just so confusing.
Also, like I have said before, my Lawyer is completely useless and is why I can't sleep at night. I'm so afraid he is going to screw this whole thing up for us. I can't stop it now because our hearing is in about 3 weeks.
Response: There is no need for an apology. I am here to assist in any way that I can.
So, long as you are making your payments, the mortgage lender cannot foreclose on your property. After you pay off your loan, the lender would issue a Release/Satisfaction of Mortgage just like any other loan and this Release would be recorded at your Registry of Deeds/Recorder of Land Records.
Yes, I tried to edit this and take off the part where I asked about house. However, I think you were already in the middle of replying to me so it didn't get edited. Thank you so much. On to my next question.