How to Keep a Home That Was Not Reaffirmed in a Prior Bankruptcy
A couple in Virginia is filing a Chapter 7 bankruptcy case. They previously filed a Chapter 7 bankruptcy, ten years ago, and at the time did not reaffirm the mortgage on their home. Since that time, they have been living in the home and paying the mortgage payments, but have recently fallen behind on the payments. Can they include the recent past-due payments in the new bankruptcy, and will they be able to keep their home?
Re: How to Keep a Home That Was Not Reaffirmed in a Prior Bankruptcy
As the homeowners did not reaffirm their mortgage in the prior bankruptcy, there is nothing to discharge in the current bankruptcy -- the debt has already been discharged. The lender has simply chosen not to foreclose because they have continued to make their mortgage payments under the now-discharged agreement.
If the homeowners want to keep their home they will need to either catch up on their payments, or they will need to negotiate some sort of arrangement with the mortgage lender.
The homeowners should discuss their case and option with a bankruptcy lawyer. Given the facts, I don't suggest proceeding with this as a do-it-yourself bankruptcy filing.