What do mortgage lenders look at when homeowner is filing Chapter 13 and is in arrears? How do you get them to reaffirm?

Generally speaking, you do not want to reaffirm a mortgage in your bankruptcy case. Filing a Chapter 13 bankruptcy will allow you to propose a plan to help you catch up on your mortgage payments, as well as continue to make your regular monthly mortgage payments. Your plan will be for no less than 36 months and no more than 60 months, and usually the missed payments are added together and divided by the number of months in your proposed plan. For instance, if you are $5000 behind and you propose a 60 month plan, you would have to pay approximately $84 a month over 5 years to bring the mortgage payments current, in addition to paying your regular mortgage payment each month. The income from your spouse as well as your daughter can be used in proposing your plan to the court. If you propose a plan that will guarantee to the lender that the mortgage will become current over the length of the plan and can show that you have the resources to pay your plan payment, then the mortgage company cannot object. By the way, there will be no interest due on the missed payments.

The key requirement in a Chapter 13 bankruptcy is that the debtor has a stable income and can afford to make their anticipated payments in their repayment plan. If you can prove to the court that you can afford to meet your payment obligations you have nothing to worry about and the mortgage lenders will not object because they are getting paid.

Take care and good luck.

Stephen M. Dunne, Esq.

Dunne Law Offices, P.C.
(215) 854-6342
1500 JFK Blvd, Two Penn Center, Suite 200
Philadelphia, PA 19102
dunnelawoffices@gmail.com
www.dunnelawoffices.com