Answered on Aug 19th, 2014 at 12:04 PM When you filed the bankruptcy, your attorney should have sent the mortgage company a "statement of intention" which says that you wanted to reaffirm the mortgage. The mortgage company then usually sends your attorney a reaffirmation agreement which you would sign and your attorney would file with the court.
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They have struggled to impliment a system that properly credits and accounts for payments received after filing on the continuing mortgage along side payments received on the pre bankruptcy arrears. Even before this rule, servicers can seldom file papers with the bankruptcy court with numbers that are consistent as to the amount the debtor owes.
Servicers must now send monthly mortgage statements to borrowers in bankruptcy under a new CFPB rule effective April, 2018. Thus ends, we hope, years of uncertainty and indifference, rooted in the automatic stay and a homeowner’s ongoing obligation on their mortgage after bankruptcy.
You continue to make your mortgage payments during and after the bankruptcy. If you are behind in mortgage payments, you can pay off the arrears through your Chapter 13 repayment plan (which lasts three to five years). As long as you make your current mortgage payments and your plan payments,...
This means that a mortgage company can still foreclose on the property to retake the collateral. A foreclosure against only the property , also referred to as an in rem proceeding. If you reaffirm a mortgage during your bankruptcy, then all obligations for the mortgage return.
Although Chapter 7 bankruptcy gets rid of your personal liability on your mortgage, the lender can still foreclose if you stop paying. Filing for Chapter 7 bankruptcy will wipe out your mortgage loan, but you'll have to give up the home.
If at any time during your Chapter 13 case, you fail to pay your monthly mortgage obligation (either inside or outside the plan), your lender can seek court permission to foreclose on your house. (Read Options if You Can't Make Your Chapter 13 Plan Payments if you find yourself falling behind on your repayment plan.)
In most cases, a mortgage lender's lien (and right to foreclose on your house) survives bankruptcy. This means that if you want to keep your home, you must pay your mortgage during and after bankruptcy.
That's the good news. Now, on to the not-so-good news. Even after a bankruptcy case has commenced and the almighty stay is in place, lenders can file what is known as a motion for relief from stay. The motion for relief allows them to continue with the foreclosure process even while your bankruptcy case is live.
The rejection or denial of a Chapter 7 bankruptcy case is very unusual, but there are reasons why a Chapter 7 bankruptcy case can be denied. Many denials are due to a lack of attention to detail on the part of the attorney, errors made on petitions or fraud itself.
A foreclosure or short sale, as well as a deed in lieu of foreclosure, are all pretty similar when it comes to impacting your credit. They're all bad. But bankruptcy is worse. Going through a foreclosure tends to lower your scores by at least 100 points or so.
After you file for bankruptcy protection, your creditors can't call you, or try to collect payment from you for medical bills, credit card debts, personal loans, unsecured debts, or other types of debt.
If you do not reaffirm your loan, then your lender will not send out monthly loan statements. Yes, if you retain the car or house, then you still owe the money and need to make a payment, but you'll need to photocopy an old statement to make sure you know the account number and payment address.
If you kept your house throughout the bankruptcy process, you are free to keep your home after the bankruptcy – as long as you continue to pay the mortgage. It may be that after you are free of all the rest of your debt you will be able to afford the mortgage payments easily. If so, you'll be able to keep your house.
After filing for Chapter 7, your property will go into a bankruptcy estate held by the Chapter 7 bankruptcy trustee appointed to your case. The trustee will sell property in the estate for the benefit of creditors. However, you don't lose everything you own.
When you file for Chapter 7 or Chapter 13 bankruptcy, the automatic stay immediately goes into effect. The automatic stay prohibits most creditors from continuing with collection activities, which can provide welcome relief to debtors as well the opportunity to regroup during bankruptcy.
If you file (and qualify) for Chapter 7 bankruptcy and your home is exempt, you can continue to make your mortgage payments if you want to keep you...
Chapter 13 bankrupcy does not affect your home mortgage. You continue to make your mortgage payments during and after the bankruptcy.If you are beh...
In some instances, you can modify a mortgage in Chapter 13 bankruptcy so that the new principal equals the actual value of your home. For example,...
You can always try to get the lender to modify your home loan so that the payments are more affordable. To learn more about the new government prog...
If your mortgage company reports that you owe a balance after your bankruptcy discharge, the lender would be in violation of the bankruptcy discharge order and the Fair Credit Reporting Act. The mortgage lender does not want to be sued for violating the order and/or Act.
If you did not sign a reaffirmation agreement with your mortgage company, your home loan was discharged along with your other debts.
Bankruptcy requires you to list all of the creditors that you owe money to on the date of filing – including the ones you want to keep like your home or car. In most jurisdictions, the mortgage company does not require the you (the debtor) to reaffirm your mortgage debt – only that you keep making your mortgage payments.
When you get a mortgage, your mortgage company gives you a loan. They let you borrow money in order to buy a property. When they do that, they place a lien on the property. A lien is a right or interest in the property that the mortgage company has until the debt (or loan) is paid in full.
If you declare bankruptcy, there are established procedures of due process. You don’t automatically lose your house. Nor is your loan accelerated to automatically become due if you’ve been current up to this point on your payments.
It all depends on the bankruptcy trustee and how they choose to handle the property. To understand how Chapter 7 impacts your existing home mortgage, you must first understand the difference between a loan and a lien. When you get a mortgage, your mortgage company gives you a loan.
Chapter 7 bankruptcy is also known as total bankruptcy. It’s a wipeout of much (or all) of your outstanding debt. Also, it might force you to sell, or liquidate, some of your property in order to pay back some of the debt. Chapter 7 is also called “straight” or “liquidation” bankruptcy. Basically, this is the one that straight-up forgives your ...
If a judge agrees, the junior lien taken out after your first mortgage may be stripped off. One thing to note is that a lender may fight this, so to give yourself the best chance of success, you may want to have an appraisal done before you file for bankruptcy.
Bankruptcy is a bummer. No one has ever said “OH MAN! I’m so excited to file bankruptcy! It’s going to make everything so awesome!” That being said, sometimes it needs to be done.
If you have a second mortgage or HELOC, you’re not responsible for it under a Chapter 7 bankruptcy, but you’re required to keep paying on it if you want to keep the house without a problem. Things become a little more complex with a Chapter 13 bankruptcy.
If you are behind in mortgage payments, you can pay off the arrears through your Chapter 13 repayment plan (which lasts three to five years). As long as you make your current mortgage payments and your plan payments, the lender cannot foreclose.
In Chapter 7 bankruptcy, most or all of your debts are discharged. In exchange, the trustee is entitled to sell your nonexempt property and use the proceeds to pay your unsecured creditor. That means that if your home has a significant amount of nonexempt equity, the trustee will sell it. To learn if your home has nonexempt equity, see Chapter 7 Homestead Exemption.
If you don't have enough equity in your home to secure the second or more junior mortgages, then the bankruptcy court can "strip" the liens securing the mortgages and reclassify the debt as unsecured. This debt then gets paid off through your repayment plan.
So, if you don't make your payments, the lender can foreclose. If you are behind in your mortgage payments and want to keep your home, you'll have to catch up in order to keep your home. Unlike Chapter 13 bankruptcy, Chapter 7 does not provide a method for you to pay an arrearage through bankruptcy. To learn more about how Chapter 7 bankruptcy ...
As long as you make your current mortgage payments and your plan payments, the lender cannot foreclose. This effectively gives you more time to make up missed payments. To learn more, see Using Chapter 13 Bankruptcy to Avoid Foreclosure. In some cases, you can get rid of second or third mortgages on your home.
In some instances, you can modify a mortgage in Chapter 13 bankruptcy so that the new principal equals the actual value of your home. For example, if your mortgage is $500,000 but the property value has declined to $300,000, you could modify the mortgage amount to $300,000.
The good news is that your mortgage company cannot raise your interest rate or change other terms of your loan to punish you for filing bankruptcy. The bad news is that some homeowners filing for Chapter 7 bankruptcy will lose their homes. In Chapter 13 bankruptcy, you can keep your home and continue with your current mortgage.
If your current mortgage is a burden you can surrender your current real estate to the lender in bankruptcy, and the lender will be limited to the home as repayment of their debt– the bankruptcy filing will prevent them from pursuing you as an individual if the sale of the property leaves a remainder balance on the mortgage debt.
Your Chapter 13 plan will propose to pay the normal mortgage amount, plus a small amount each month for the purpose of catching up on missed payments over a 60 month period. When the Chapter 13 bankruptcy closes out after 60 months , your mortgage will be deemed current.
Generally speaking, you are allowed $35,000.00 in equity per spouse to keep a home in Chapter 7. This known as an Exemption. In Chapter 13 you can have additional equity beyond those limits; however, it will affect your Chapter 13 payment.
Your remedy for this is to send a letter once a year to each credit bureau indicating the payments you have made. If the creditor fails to file a response disputing that you made the payments, you will get credit for the payments on your credit reports.
Unlike reaffirmations for car loans, mortgage debt is very rarely reaffirmed in bankruptcy. Courts frown upon it in an attempt to protect debtors who have recently received a discharge from substantial debt. The American Bankruptcy Institute has written at length about this stance.
Unlike reaffirmations for car loans, mortgage debt is very rarely reaffirmed in bankruptcy.
You keep the house as long as you keep making payments. You receive credit against your balance for all of your payments, and you build equity presuming the value of the house continues to increase. One downside to not reaffirming a home is that the mortgage company will not report your payments to the credit bureaus.
The opening of a bankruptcy case puts the automatic stay in place which prevents creditors from collecting on a debt. Your mortgage company will stop sending you mortgage statements in order to ensure that they are not violating the automatic stay by collecting on a debt during your bankruptcy.
If you intend to keep your home and make the payments on the home you may be able to get mortgage statements sent to you by writing a letter to the mortgage company that requests your mortgage statements. If you are in an open bankruptcy case then you will also need the signature of your bankruptcy attorney.