If you don’t reaffirm your home loan in bankruptcy but continue to make payments on time, can the bank take your house several years down the road?

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If you don’t reaffirm your home loan in bankruptcy but continue to make payments on time, can the bank take your house several years down the road?

We filed Chapter 7 last year. We attempted to reaffirm our home but the judge didn’t allow it. We have never been late on our house payment and have continued to make payments on time to date. We have about $15,000 in equity in the house. Home values in this area have stayed steady through the recession and the area is still growing rapidly. Our property is on the main strip through town and as development moves toward us we expect our home value to increase dramatically. If we continue to make all our payments on time can the bank take our house several years down the road?

Asked on June 13, 2011 under Bankruptcy Law, Kentucky

Answers:

Mark J. Markus / Mark J. Markus, Law Offices of

Answered 10 years ago | Contributor

The bank can only "take" your house (i.e. foreclose) if you fall behind on your contractually due payments or default on other provisions of your Promissory Note and Deed of Trust.   Reaffirmation has nothing to do with it.  In fact, you're very lucky the court did not allow the reaffirmation.  It would have accomplished nothing for you except to make you liable for a deficiency in the event your property is foreclosed on someday.

 

Mark J. Markus, Attorney at Law

Handling exclusively bankruptcy law cases in California since 1991.

http://www.bklaw.com/

Mark J. Markus / Mark J. Markus, Law Offices of

Answered 10 years ago | Contributor

The bank can only "take" your house (i.e. foreclose) if you fall behind on your contractually due payments or default on other provisions of your Promissory Note and Deed of Trust.   Reaffirmation has nothing to do with it.  In fact, you're very lucky the court did not allow the reaffirmation.  It would have accomplished nothing for you except to make you liable for a deficiency in the event your property is foreclosed on someday.

 

Mark J. Markus, Attorney at Law

Handling exclusively bankruptcy law cases in California since 1991.

http://www.bklaw.com/


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