If in our Chapter 7 we did not reaffirm our home, what are the consequences if we walk away at this point?

UPDATED: Feb 9, 2014

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If in our Chapter 7 we did not reaffirm our home, what are the consequences if we walk away at this point?

We have continued to pay both a first and second mortgage as agreed for almost 3 years. Do we have any leverage to ask for both mortgages to be combined for a shorter term if we are willing to reaffirm?

Asked on February 9, 2014 under Bankruptcy Law, Ohio


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

If you did not reaffirm, you can walk on the debt, losing the home, but otherwise escaping it (i.e. they can't come after you for any balance due, such as if the home is underwater or otherwise will not sell for enough to clear the debt). That threat certainly gives you leverage, though the lender still can choose to not work with you; I'm not sure why they would do that, since your proposal appears in everyone's best interest, but they do have the legal right to refuse.

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