Legal Question in Bankruptcy in Indiana

Re-affirmation

I'm writing because the attorney I used previously is not available any longer.

I filed a bankruptcy in November, 2001 and was discharged in February, 2002. I've continued to pay on a home equity loan, second mortgage, that I thought had been re-affirmed. I just learned today that the loan had not been re-affirmed. I was told by a bank employee in the bankruptcy department of my bank that due to the bankruptcy status of the loan they could not call or write me even if I became delinquent in payments but I am still obligated to pay this loan because I kept the house and I am still making mortgage payments to my mortgage company. The employee also said that if I stopped making the payments then the bank could foreclose on the home. Is this true? My bank did not object at my confirmation hearing and I have never heard anything from them. Did they miss the opportunity to object? Should I stop making these payments? Should I hire another attorney?


Asked on 11/15/04, 11:47 am

1 Answer from Attorneys
Eric Southward Southward & Haggard

Re: Re-affirmation

Franly, I don't sign reaffirmation agreements for anything. ALL the agreement does is allow your mortgage company to pursue you personally for the debt if you ever defaulted on it and it went into foreclosure.

What they told you is correct. Because of the bankrupcy and lack of the reaffirmaiton agreement, they will not contact you. You can contact them however. And as is in any case, if you ever default on the loan, they can seek foreclosure options. But they could have done this with you signing the agreement too.

As long as you remain current on the loan, the lack of reaffirmation agreement won't cause you any problems. In fact, there really isn't a good reason to sign the agreement. You retain the option to walk away from that loan in the future (albeit, that means giving up your house) if you should ever find yourself in financial difficulty and cannot afford to keep your house. Had you signed the agreement, that would not be an options. Also, you cannot re-open your case to file the agreement, but again I wouldn't have recommended you signing one anyway.

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Answered on 11/17/04, 3:24 pm


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