Why You Should NOT Reaffirm Your Home Loan
Many of my clients are set on reaffirming their loan on their home in a chapter 7 bankruptcy. I want to remind all of you that you can keep your home in a chapter 7 bankruptcy if it can be exempted as well as if you keeping current on your mortgage. There is absolutely no compelling reason to reaffirm the debt on your home in bankruptcy.
If you do not reaffirm the debt on your home then the bank cannot come after you and take back the home unless you stop staying current on your home (which is what they could have done before you filed for bankruptcy). When you file for bankruptcy and we list the home loan debt, that allows you to not be personally liable for the home loan debt if at any time in the future you stop being current on the home loan, the bank forecloses, and gets a judgment for the deficiency against you personally.
Lenders are not sending letters to clients apprising them that they will continue to send them bills for the home loan as usual even if they do not reaffirm their mortgage. So simply put, don’t reaffirm the debt, and continue to make your usual payments to the bank and enjoy your home without any personal liability.
Please give me a call about specific details since I am just touching the surface of the issues in this post. Call me at (973)-272-7691.
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