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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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Kurt OKeefe | Attorney Advertising

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