Hello everybody, Edward Kelly, Oklahoma bankruptcy lawyer, continuing our series on reaffirmations. As I explained earlier, reaffirmations are bringing a debt back out of bankruptcy, meaning making it where you have to pay it and it’s not discharged. Now, we’re going to talk about why you don’t necessarily reaffirm a home.
For people who own homes, their biggest anxiety is usually about keeping their house. That’s understandable, especially if they’re incurring on their payments and not planning to let it go back to the bank. However, when it comes to reaffirmations, you don’t necessarily need to reaffirm a home.
Reaffirming Personal Property vs. Real Property
When you file for bankruptcy and reaffirm your car loan, it’s because vehicles are considered personal property. A bankruptcy court treats personal property differently than real property, as do most courts. Even if you’re current on your car note, if you file a Chapter 7 and don’t sign a reaffirmation, the lender can repo that vehicle. Therefore, it’s essential to reaffirm on your vehicle if you want to keep it.
On the other hand, when it comes to your home, reaffirming only brings back your personal liability. The note is secured with the home, whether you sign it or not. The bank can always foreclose on the home if you don’t pay. However, if you sign that reaffirmation, not only can they repossess the house, but they can auction it and come after you personally for any shortfall, just like a normal foreclosure.
Should You Reaffirm Your Home?
If you don’t sign the reaffirmation, the bank doesn’t gain any new ability to foreclose on you. They’re still constrained by state court strictures as far as foreclosure. So, a lot of my clients, once they research the issue and I explain it to them, choose not to reaffirm the house.
If you are still unsure about signing a reaffirmation for your home, don’t hesitate to contact me, a bankruptcy attorney in Oklahoma City, at oklahomacitybankruptcyattorney.pro for a consultation. I’m here to help you protect your home and make informed decisions during your bankruptcy process.
The Oklahoma City, Oklahoma law office of Edward R. Kelley provides bankruptcy representation throughout Oklahoma including Oklahoma County, Cleveland County, Canadian County, Guthrie County, Payne County, Grady County, Logan County, Lincoln County, McClain County, Pottawatomie County, Kingfisher County, Norman, Edmond, El Reno, Stillwater, Shawnee, Purcell, Chickasha, Guthrie, Chandler, Enid and Perry.
