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Should I sign the reaffirmation agreement to get the charges removed from my mortgage?

Taunton, MA |

I recently filed Ch. 7, but took care to place a stay on both my auto & home loans. I have never been late paying either of these loans, they are automatically deducted from my checking account each month.

My mortgagee filed a motion for me to sign a reaffirmation agreement. They also added their attorney fees to my mortgage (at 11.74%) My atty got the mortgagee's atty to agree to remove the fees from my mortgage if I signed the reaffirm. I received the reaffirm agreement & it was incorrect (much higher than what I owe). It was sent back to the bank's atty - after a month I received another 'incorrect' reaffirmation agreement (as I had made another loan pymt). While waiting for a correct version - my bankruptcy was officially discharged & more atty fees were added to my mortgage (a total of $2006.00) so far.

My atty now suggests I should 'eat' the fees & not sign the reaffirm. He says he has not spoke w/the bank's atty. I don't know if this is in my best interest & I am seeking a 2nd opinion. Please advise and thank you.

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Attorney answers 1


There is no longer an issue as to whether you should sign the reaffirmation agreement. Once a Chapter 7 debtor receives a discharge, he cannot enter into a reaffirmation agreement. Thus, even if you signed the reaffirmation agreement and file it with the court, the court will bounce it.

In many parts of the country, Chapter 7 debtors are not required to reaffirm a mortgage in order to be able to keep their house. In such areas, as long as you continue to make your regular mortage payments, the mortgage company cannot take any action against you simply because you previously filed for bankruptcy relief. You should discuss with your attorney what the law is in your jurisdiction.

Thus, the issue now is whether the mortgagee has assessed you fees which are unreasonable or improperly calculated. This is something else which you should review with your attorney or discuss directly with the mortgagee.

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