Reaffirmation Agreement Mortgage
In the event of a Chapter 7 bankruptcy, all your debts are usually destroyed once the case is closed. However, if you buy your home, you can keep it, which means you must formally agree to continue paying the mortgage. Otherwise, these debts will also be eliminated. In entering into a confirmation agreement, a borrower often retains the possession of an asset held as collateral such as a house or a car, provided that he can repay in full the debts he owes for that specified loan. In Chapter 7 bankruptcy proceedings, a confirmation agreement is used if the filer wishes to continue to repay one or more of his or her debts. This is usually used for secured debts such as car loans or home loans, where the person wishes to keep the property. After weighing the pros and cons of a confirmation agreement, your choice is to sign an agreement with your mortgage lender. If you do not sign a confirmation agreement, it is unlikely that a company will initiate enforcement proceedings as long as you are aware of your mortgage payments and do not violate other conditions of the mortgage note, such as maintenance. B home insurance and the payment of property taxes. Most mortgage companies want to avoid enforced enforcement as much as possible.
But that is precisely why you would prefer not to sign such a confirmation agreement. If, at some point, you could no longer pay the mortgages, which led the first mortgage lender to close the house, the second and/or the third mortgage lender would most likely be excluded. If there was NOT a timely filing of a confirmation agreement as part of the bankruptcy proceedings, you would not be liable. But if it is a confirmation agreement filed, you would be liable for the entire second or third mortgage balance. It is in the borrower`s best interest to go through legal proceedings, such as confirmation. B, when it comes to solving or managing financial obligations. Confirmation prevented Jean from closing his house. However, if the lender is unable to make the mortgage payments under the new conditions, the lender will take possession of its home and initiate foreclosure proceedings. Borrowers who simply have to get out of debt and probably do not allow themselves to pay regularly can`t get anything out of the assertion process. The assertion makes a borrower liable for a debt and is agreed by a formal agreement with the courts and is therefore a legal procedure for the borrower in order to protect himself and his property.
If you have a home, you can keep it after you file for bankruptcy, especially since it is more difficult to get some kind of credit once you have gone bankrupt. If the court authorizes the agreement, it will be as if you have never filed a balance sheet for these debts and you will still be liable for all of that debt. If, for the reason mentioned above, a mortgage is not confirmed in bankruptcy, you would have the problems mentioned in the first sentence of this blog post: your mortgage lender could stop sending you his monthly statements and no longer report their payment to the credit bureaus. (For more information on dealing with these two specific problems, see the links in this first sentence.) If you are considering validating a mortgage during your Chapter 7 case, it is convenient that it can be difficult to get the lender to prepare a confirmation agreement. Your lawyer may be able to convince her, but it will probably take a concerted effort.