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Bankruptcy Law/Reaffirmation glitch?

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Expert: - 11/27/2010


Question
We did a Chapter 7 in Michigan were told by 2 attorneys reaffirm or surrender. We are keeping the house. Value 150k, owe 125k on first, 59k on second. 2nd's Secured portion listed in BK schedules as just under 25k. We intended to reaffirm both but only the first filed one. The 2nd refused stating to loan to value ratio as the reason. We are current on both and they are both accepting payments. Should we be concerned about this unexpected refusal? We have a mod on both but the 2nd was only temporary. Can we modify the 2nd after BK, or would a settlement offer be a better plan since there was no reaffirmation?  

Answer
There is no reason to reaffirm debts on real property.  Doing so accomplishes nothing for you and only benefits the lender.  Sounds like you need to do a new loan modification on the 2nd.  The loan modification you had with the first mortgage holder would be superseded by your reaffirmation agreement.

Mark J. Markus, Attorney at Law
http://www.bklaw.com/

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Mark J. Markus- California Bankruptcy Attorney

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Mark J. Markus is a Los Angeles bankruptcy attorney who has practiced exclusively bankruptcy law in California since 1991 and is rated A+ by the Better Business Bureau and is AV-rated by Martindale-Hubbell. He represents debtors, creditors, and Trustees in Chapter 7, Chapter 11, and Chapter 13 of the bankruptcy code throughout California.

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Visit our California bankruptcy webpage at http://www.bklaw.com for more information on bankruptcy in general and Mark J. Markus in particular. Many questions are answered on the web page (hint, hint).
The Markus webpage also contains more information on

  • Which Chapter to File,
  • business bankruptcy,
  • chapter 7 bankruptcy,
  • chapter 11 bankruptcy,
  • chapter 13 bankruptcy,
  • Do You Need a Lawyer to File Bankruptcy?
  • Frequently Asked Bankruptcy Questions

    Also visit our Los Angeles bankruptcy blog for interesting articles and much more.



    Organizations
    Central District Consumer Bankruptcy Attorneys Association (CDCBAA) Los Angeles County Bar Association (LACBA) Commercial Law & Bankruptcy Section of the Los Angeles County Bar Association Financial Lawyers Conference (FLC) National Association of Consumer Bankruptcy Attorneys (NACBA) Los Angeles Bankruptcy Forum (LABF) American Bankruptcy Institute (ABI) San Fernando Valley Bar Association (SFVBA)

    Publications
    Central District Consumer Bankruptcy Attorneys Association Newsletter September 2007 (Vol. 1, Issue 2)

    Education/Credentials
    J.D., University of Arizona 1990. B.A. Economics, California State University, Northridge 1986. For more details please click here

    Awards and Honors
    AV Rated by Martindale-Hubbell (http://www.martindale.com) A+ Rated by Better Business Bureau

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