Reaffirming Mortgages in Chapter 7

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Reaffirming mortgages in Chapter 7 does not make sense, unless the mortgage company is changing the terms of the mortgage to the benefit of the debtor.

Recent cases support this this position, a Virginia court declined to approve an agreement when the debtor was current on a home worth more than the mortgage balance, noting that ride through still applies to mortgages.

An Ohio case shows the problem with reaffirming a mortgage, as the debtors surrendered the house without properly rescinding the reaffirmation agreement, and lost their house and were still personally liable for the mortgage.

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