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Mortgage in chapter 7. I kept the house. In fact it was loan was modified during the BK. Checked crdt report & shows discharged

Riverside, CA |

I want to get positive credit for repaying this mortgage. Why are they not giving my those positive repayment marks and what can I do about it. My understanding is that 1st mortgages almost never require a reaffirmation agreement anyway.

In my situation, they actually did a modification during the chapter 7 and even filed a motion to get it approved by the court. It was approved.

What can I do about this? I need my credit to be rebuilding.

Attorney Answers 4


Reaffirmation for a real property is not required under the bankruptcy code nor is it generally signed by a bankruptcy attorney. When you file for bankruptcy, and in regards to real property, your personal liability to the real property is discharged. By signing a reaffirmation agreement, you "reaffirm " or essentially re-signing the contact again. Without that reaffirmation, you are not personal liable on the mortgage note and unfortunately, will not be credited to you in your credit score. (Beyond the personal liability, your name is probably still on the deed unless the bank foreclosed on your home or did a deed in lieu of foreclsoure. Until your name on the deed is transfered, you are liable to the extent of the HOA payments, if any, real property taxes and liability arising from you real property, ie personal injury due to defect on your house, etc).

Signing a reaffirmation would have allowed your credit score to reflect your payments, but you would have been personally liable for the note once again.

Sorry for the vague answer. This may not been the answer you may want to hear, but there are different ways to rebuilt your credit beyond the mortgage note.

Depending on whether you did your chp 7 bankr pro se or through an attorney, consult your prior attorney (if appliable) or consult a local bankruptcy attorney to assist you further.

Good luck and wish you success

Min Gyu Kim (Peter)

The foregoing are comments to a general question of law, and should in no way be interpreted as legal advice. This information does not create an attorney-client relationship. The choice of a lawyer is an important decision and should not be based solely upon advertisements

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Hello. To answer your question... the Chapter 7 discharge effectively discharged your personal obligation to repay all of your pre-filing dischargeable debt. Unfortunately, the loan modification did not create a new loan, but rather modified the terms of your original loan. As such, it will not reflect on your credit report. The upside is, should you ever need to "walk away" from the house, you will not have personal responsibility for this modified (and discharged) debt. Unfortunately, the downside is you don't get the benefit of rebuilding your credit by way of your timely made payments.

At this point, short of getting a new loan (ie. re-fi), there really isn't a way of using this modified (and discharged) debt/payment to rebuild your credit. You may have opted to reaffirm the debt while your chapter 7 was pending, but this practice is nearly always discouraged by attorneys as it may open you up to significant future liability, and runs counter to the concept of the "fresh start" sought by filing bankruptcy.

There are many other alternative ways to rebuild credit (vehicle loans, secured/unsecured credit cards, etc...). It may be helpful to visit the credit bureau websites to find out tips on how to rebuild credit after a Chapter 7 bankruptcy. Sorry... I wish I had a different answer for you. Hope this one helps none the less!

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In Arizona, if you obtained a reaffirmation agreement, then the creditor should report on your credit.

Call the creditor and ask why they are not reporting. It could be a mistake on their side.

Jim Webster

1845 S. Dobson Rd. Ste 201
Mesa, AZ 85202

(480) 464-4667

We are a debt relief agency. We help people file for relief under the Bankruptcy Code.

Please contact me directly with document for a free 30 minute consultation to get more concrete advice. This is not legal advice. I don't have enough information to give actual legal advice. I can only take the limited information presented and provide a framework to know how your situation may turn out. I may have questions that bring up issues you did not think were important but make a big difference.

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I agree with my colleagues that your debt to the mortgage company was discharged and that reaffirmation is not a good idea on mortgage loans. However, to get your payment history reported on your credit report, you can ask for a payment history from your mortgage company and sent it to the credit bureaus. It will be difficult for the mortgage lender to challenge their own information.

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