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Bankruptcy Law/Reaffirmation of Mortgage After Chapter 7

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Expert: - 5/7/2010


Question
How much will reaffirming my mortgage help to improve my credit score?  Could it be advantageous in that way as far as rebuilding your credit rating or would it not be worth the risk of reassuming over a $100,000 mortgage balance since you get to keep your home anyway as long as you pay for it?

Answer
You accurately stated the dilemma.  I am not a credit reporting expert, and I doubt anyone can accurately quantify how much of an improvement you'll get in your credit score by reaffirming a mortgage.  Reaffirmation in general is a very bad idea.  It can turn a non-recourse secured debt into a recourse loan, and if in the future you end up having your house foreclosed on, you could be liable for any deficiency balance (or for taxes for forgiveness of debt).  This can be substantial.   My opinion is that you're better improving your credit score by getting a vehicle payment, or paying off a credit card timely, but there are others who advocate reaffirming mortgages.

You really have to weigh the costs and benefits and decide for yourself.

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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.

Experience

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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