Reaffirmation Questions

[swanthog]

What is the name of your state? OR

I have only two secured debts, my property and my vehicle. I want to reaffirm both debts but am curious to know what will happen if I do not. Both accounts are in good standing. Can I just go on making the payments, fulfill the orginal contracts, and eventually own the properties?

 

[kwalla]

After reading many responses by LadynRed, here you go.

You don't HAVE to reaffirm. As long as you continue to make timely payments and honor your contract, your mortgage holder and auto lien holder are happy people.

If there was an emergency in the future, by NOT reaffirming, you could walk away from the obligation without recourse. I think that is why the experts on this forum will always tell you not to reaffirm your debts.

Even if you insist on reaffirming, it is the sole decision of the trustee/judge to allow you to do so.

 

[swanthog]

Thanks for your comments Kwalla. That's good to know since our truck is the only reliable transportation we have that will carry all of us. Looking at the reaffirmation coverletter, I *was* worried that it would not be approved since the payment on the truck is sooo high.

So the follow up question would be, why would anyone want to submit a reaffirmation? Can one negotiate a lower principle balance, interest rate, and or term?

 

[HomeGuru]

After reading many responses by LadynRed, here you go.

You don't HAVE to reaffirm. As long as you continue to make timely payments and honor your contract, your mortgage holder and auto lien holder are happy people.

If there was an emergency in the future, by NOT reaffirming, you could walk away from the obligation without recourse. I think that is why the experts on this forum will always tell you not to reaffirm your debts.

**A: BS.
********
Even if you insist on reaffirming, it is the sole decision of the trustee/judge to allow you to do so.


**A: I never once advised a writer on this website not to reaffirm a mortgage. And I disagree with your (LR's) last statement.

 

[swanthog]

HomeGuru,

Do you know if it is possible to re-negotiate the terms on the auto contract through reaffirmation? In your experience, will the lien holders budge on the original terms?

Thank you all.

 

[Ladynred]

HG.. why do you disagree ?? Reaffs have to be approved by the BK court. Unless there is state law that says you MUST reaffirm to keep the property (some states do), then it was my understanding its totally up to the court to allow the reaff. You can ask, that doesn't mean the court is going to agree if its not required.

Reafffirming a mortgage is usually a GOOD idea, as long as your income is stable and you can make the payments w/o killing yourself. It gives you a solid way to help rebuild your credit. If you're lucky, property values will go UP rather than down, and you're still building equity you can benefit from later should you decide to sell it.


Reaffirming a car is another matter. They depreciate so fast and can be wrecked in an instant, stolen, or break down that its not a great idea to lock yourself into a reaff agreement.