Legal Question in Bankruptcy in Michigan

chapter 7 bankruptcy mortgage reaffirmation

In 2001 I filled for bankruptcy in Michigan. I had a letter of intent that stated I was keeping my home and that the debt would be reaffirmed. My lawyer told me to reaffirm all I had to do was to continue to make payments. My mortgage payments continued to be reported to the credit reporting agencies and showed in good standing so I thought it had been reaffirmed as my lawyer had stated. I find out now this is wrong. The mortgage recently went to another mortgage company, they are stating that the mortgage was included in bankruptcy and will not report payments to the credit reporting agencies. Am I liable for this debt? If I stop paying and move out can they go after me for any money after the sale of the home? Also when they repossess the home-will my credit report show it as being a recent repo or as of the bankruptcy date which was when I no longer owed on the debt? Will this hurt my credit any further than the bankruptcy already has?


Asked on 8/11/08, 8:33 pm

1 Answer from Attorneys
Lesley Hoenig Lesley A. Hoenig, Attorney at Law

Re: chapter 7 bankruptcy mortgage reaffirmation

What your attorney probably meant was that in order to keep your house you just need to keep current on your house payments. Your attorney probably did not have you sign a reaffirmation agreement because doing so means you remain personally liable even though you received a bankruptcy discharge.

Assuming you never signed a reaffirmation agreement, you are not personally liable for the debt, they would not be able to pursue you if you let the house go because you are discharged from personal liability. With that said, however, I don't see why the mortgage company would have any desire to foreclose on your house if you are current on the payments. But they can proceed with foreclosure if you get behind, they just would not be able to get a deficiency judgment against you.

Read more
Answered on 8/12/08, 2:46 pm


Related Questions & Answers

More Bankruptcy Law questions and answers in Michigan