What happens if Lisa does not reaffirm her mortgage?

Although Lisa’s personal liability to pay the mortgage obligation is gone, her property is still subject to a lien in favor of the mortgage lender. Most mortgage obligations are comprised of two parts.

What happens to your house when you file Ch.7?

You have all benefits of ownership after filing Ch. 7 bankruptcy regarding your home, even though you didn’t formally reaffirm that debt with the lender. You simply had no personal liability after your Ch. 7 discharge, that is, had you defaulted on the loan the lender could not have sued you for a deficiency.

Is it necessary to reaffirm your mortgage after bankruptcy?

Reaffirming your mortgage is not necessary in order to keep your home. In most cases it is not advisable that you reaffirm your mortgage. Signing a reaffirmation agreement for your mortgage, makes you personally liable for the debt, after bankruptcy.

What should be included in a chap application?

CHAP staff may request additional documentation as needed. All applications should include the following:

Can a mortgage be reaffirmed if you are not current with payments?

Reaffirming your mortgage may not be possible in all states and under all circumstances. It requires the consent of both your lender and the court. Your lender’s consent usually hinges on whether you’re current with your payments, but some lenders just don’t want to be bothered with the fuss of creating and signing a reaffirmation agreement.

Do you have to reaffirm a Chapter 7 discharge?

You are cleared of the debt (you no longer owe it) the instant you are discharged, provided you don’t reaffirm. (There is a catch to this, that some post-BK7 loan modifications actually wind up reaffirming the debt, but that’s a different post.)