Mortgage Reaffirmation and Bankruptcy

Why should you most likely not sign a mortgage reaffirmation agreement during a chapter 7 bankruptcy?
Stephen Dunne, Esq.

Stephen Dunne, Esq.

Philadelphia bankruptcy, credit report, and debt collection abuse attorney

Why should you most likely not sign a mortgage reaffirmation agreement during a chapter 7 bankruptcy?
Stephen Dunne, Esq.

Stephen Dunne, Esq.

Philadelphia bankruptcy, credit report, and debt collection abuse attorney

Today is the day.

It’s past time you had someone in your corner.
Our first consultation is always free.

Mortgage companies will attempt to have a debtor sign a reaffirmation agreement during a Chapter 7 Bankruptcy case.

Most of the time, it is not advisable to sign a Mortgage Reaffirmation agreement.

Think about it. When a debtor files a Chapter 7 bankruptcy, all of his/her debt is discharged. Why would you want to “guarantee” that you are liable on a mortgage debt after bankruptcy. It completely defeats the whole purpose in filing bankruptcy in the first place. A debtor files bankruptcy to “discharge” debt.

In a Chapter 7 bankruptcy, a debtor can surrender the home and walk away without any debt or continue to live in the home and pay the mortgage, insurance and taxes.

Does a debtor have to reaffirm the mortgage note and sign a binding contract making him/her personally liable on the mortgage note post bankruptcy.

The answer to that question is emphatically “NO.” Unfortunately, I imagine a lot of debtors sign reaffirmation documents not realizing the serious consequences of a reaffirmation agreement.

Word to the wise. If it the document came from a bank, read it twice, show it to a trusted friend and consult an attorney if you can afford it. Do not simply sign it and return it to the bank.

Let's go over how I can help. Our first chat is on me.

Name*
How do you prefer to be contacted?*
Check all that apply.
What is the best time of day to reach out?*
Check all that apply.
How can I help?
Check any or all that apply.