Legal Question in Bankruptcy in Nevada

reaffirmation of debt

I filed bankrupt in Nov. of 99, and at that time reaffirmed on my 1st morg. However, I did not reaffirm on my 2nd. (both morg, are with seperate companies) At the time of my reaffirmation hearing, the judge said if the 2nd company wanted us to reaffirm, he would not sign it, because since obtaining the 2nd morg, the property value has dropped dramatically in our area and it would not be worth it. It turns out they did not require us to sign a reaffirmation only on the first. My question is that if my home is not worth more than I owe on the 1st morg, do I have to pay the 2nd? On my credit report it is showing a zero balance, with zero payments and included in bankruptcy. What could they do or would they do if I tried to stop paying on this bill? Also what would show on my credit report?


Asked on 7/16/03, 1:47 am

1 Answer from Attorneys
Dorothy Bunce

Paying second mortgage after Bankruptcy

If you want to keep your house, you have to pay all mortgages or deeds of trust - otherwise either lender can foreclose and evict you.

The reason the Bankruptcy Judge would not approve a reaffirmation is because if you lost the home through a foreclosure, the 2nd mortgage company could sue you for any balance left after paying out the sale proceeds on the first and second mortgages.

As to the credit reports, it is an error that you have a zero balance on the second mortgage. Errors are not uncommon on credit reports. I would expect a foreclosure to show up on your credit report if you lost the house.

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Answered on 7/21/03, 1:22 pm


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