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screw up with reaffirmation

Posted on: 07th Aug, 2010 12:30 pm
Hi,
I am wondering.... We live in Michigan. We filed chapter 7 last year. We wanted to reaffirm our car and home. We kept hearing from our mortgage company that they were still waiting for our lawyer to send them the reaffirmation agreement, so it was a back and forth phone call thing between myself, our lawyer and the mortgage company. The lawyer said she faxed it over a few times but (according to the mortgage company) by the time they received it, it was too late; our bankruptcy had been discharged and closed.
We just moved in this house a few years ago and wanted to stay for a few more years but not forever.

So my question is, when we decide we want to move, do we have any rights to the house as far as any equity is concerned??? Or does the house belong to the bank and we are basically just "renting it??"
We don't want to be putting money into a home (as far as upgrades and what-not) that we won't see any return on when we move out. Our credit is already screwed up because of the house. It shows that we discharged $168,000 that we DIDN'T want discharged!!!!
I called my lawyer and she said that we could've paid $250 to re open the bankruptcy but that we only had a few months after it closed to do it and that it was too late. I wasn't real keen on the idea of paying more money when we didn't screw up. But I have no proof who's screw up it is. The lawyer claims no responsibility and says it's not her fault if the mortgage company never received it. So I am just sick about it. We were hoping that by reaffirming our house, that it would help build our credit back up but now we don't even have that!!!!!

Should we just walk away? Or do we have some rights to the house still?????

Thanks! Amber
Hi Guest,

As you haven't reaffirmed the mortgage, you can simply surrender the property to the lender and let him sell it off to recover the dues. You won't be liable for the balance dues resulting from the sale of the property. For the time being, you can rent a property and take steps to improve your score. Then you can apply for a mortgage to buy a new property.
Posted on: 09th Aug, 2010 12:05 am
I am aware that we could walk away from the house but we don't really want to. We'd like to be able to stay until we want to sell. What I'm wondering, is CAN we sell it??? Do we have any rights to the house? Can we sell it and keep any equity or does it belong to the bank now????
Posted on: 13th Aug, 2010 05:41 pm
Hi Guest,

Unless you surrender the property to the lender, you've rights to it. You may be able to sell off the property but as the lender holds the lien on the property, you may have to pay off the sale proceeds to the lender in order to satisfy the lien.

Thanks
Posted on: 14th Aug, 2010 12:53 am
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