Asked by who?  Why, the mortgage company, of course.

Here in Michigan, most homes with mortgages are underwater, worth less than what is owed on them.

So, you file Chapter 7 bankruptcy, your house is worth $100,000, and you owe $#120,000 on it.

This is a time you can walk away from the house, you will be discharged in the Chapter 7 bankruptcy from having to pay anything on the mortgage note.  (Unless the mortgage company sues you in the bankruptcy court, by filing an adversary proceeding and proving you committed fraud in obtaining the mortgage)

But, like most of my clients, you want to keep your house.

Of course, you have to be able to make the mortgage payment after your Chapter 7 bankruptcy.

And keep paying the taxes and keep it insured, just like you did before you filed bankruptcy.

Do you have to reaffirm, to sign a binding reaffirmation agreement, that makes you personally liable on that mortgage note as if you had never filed bankruptcy?

No.

I have yet to see a mortgage company in Michigan foreclose on someone who was keeping the taxes and payments made, and had the home insured, just for not signing a reaffirmation.

It borders on malpractice for an attorney to sign off on a client reaffirming a debt that is more than the value of the home.

I look at upside, downside.

I see no downside to not reaffirming.

Now, some of the mortgage companies say they will not tell the credit reporting agencies that you are making the payments on time.

So?  You have the right to include accurate information in your credit report.

You can add that at least once a year, yourself, without them.

They are required to give you at least annual statements.

The downside?

You sign, something else goes wrong, and you cannot make the payments, they foreclose for the $100,000 the home is worth, and sue you for the $20,000 difference.

Unless they are giving you some fantastic modification, DON’T DO IT!

In Chapter 7 Bankruptcy, Reaffirm My Mortgage?

Related posts:

1. Mortgage Modifications: Problems
2. What Happens In A Michigan Foreclosure?
3. Reasons To File Bankruptcy, Musically Presented

“The secret the credit card companies don’t want you to know!”

“Don’t file chapter 7 bankruptcy!”

“If you owe at least $10,000 in credit card debt, you are eligible for our program!”

“Recent changes in federal law require credit card companies bailed out by the federal government to settle their debts with you!”

Balderdash!

Hey, when something sounds too good to be true, it usually is.

Most recently, the Minnesota Attorney General sued six of these debt settlement outfits

My position has always been, bankruptcy is a last resort.

Let me share some of the disasters my clients have suffered with these “miracle” programs.

This is how they operate.

They are usually not located in the state you are in, so they are hard to hold accountable for refunds or lies.

Their ads and websites and phone calls trumpet their success, but the contract you sign NEVER guarantees anything.

You send them money, usually they require that you authorize it to come right out of your bank account, and they do not even deal with your creditors until they have a certain amount from you.

It may take months, years, before they have enough from you, after deducting their fees, of course, to even answer the phone when your creditor calls.

And, the creditors do not wait for the debt settlement company, they just sue you, garnish your wages in states that allow it, like Michigan.

Of course, you are behind on paying all your credit cards, because you are sending what you have left every month to the friendly debt settlement company.

And/or, they told you: stop paying the credit cards.

So, your credit report is taking the hit for being in default, the hustler/con man debt settlement company has your money, and you have no relief.

In fact, you are getting harassed more than before you hired them.

I represented one couple, in their 80s, who were so ashamed of their debt problems, they did not tell anyone.

Their kids were helping them out, and they hired two of these debt settlement scam outfits, to handle one credit card each.

After over six months of paying, all they had to show for it was a lawsuit against them by each credit card company.

Sure, sometimes you send enough money that they can make a deal to reduce your debt.

Then, you get a 1099 income tax form for forgiveness of debt income.

Get your financial information in order and check with a lawyer before falling for one of these scams.

Bankruptcy, Or Debt Settlement Scam?

Related posts:

1. Credit Card Debt Defaults Record High
2. Should I Use A Debt Settlement Company?
3. Can a Debt Settlement Company Help Me?

who have filed Chapter 7.

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