Expert: LEE HORNER - 1/23/2012

Question
I Filed chap 7 in Dec 2011. I am not reaffirming my two loans, and only continue with payments.
Now after waiting two years, I receive an offer from the lender to modify my second loan. But
I first must make three monthly trial payments before final approval.
If I accept the actual modification, will I lose Chap 7 protection?
My Chap 7 discharge duration is almost over and I may be receiving
The discharge in a month or so.

Answer
You might well be reviving a discharged debt on the second.  Many people with underwater seconds just quit paying the second and all you wind up with is a lien on the property so you can't sell it or re-fi the first without paying it off.  Owing to the fact that property values won't be going up any time soon, that's a risk many people are taking.  Whether you should put yourself in a position of being sued on the second note by reaffirming is a question only you can answer.

I would never sign a reaff certification for a client on such a situation and I doubt a judge would let you do so either as your only alternative if your attorney won't sign off or you're on your own, is have the court approve it.

Unless they're slicing the balance in 1/2 then it might make sense but it's not likely that's the offer.

Good luck!

Lee