Mortgage reaffirmation agreement form: What it is, why you might need it, and how to fill it out
If you`re considering filing for bankruptcy, you may be wondering what will happen to your mortgage. Depending on the type of bankruptcy you file, you may be able to keep your home, but you`ll need to sign a mortgage reaffirmation agreement form. In this article, we`ll explain what that is, why you might need it, and how to fill it out.
What is a mortgage reaffirmation agreement form?
A mortgage reaffirmation agreement form is a legal document that you sign during bankruptcy proceedings to indicate that you intend to keep paying your mortgage. By signing this form, you are agreeing to continue to make your mortgage payments as if you had not filed for bankruptcy. If you don`t sign the form, the lender can require you to sell your home, even if you are current on your payments.
Why might you need a mortgage reaffirmation agreement form?
If you are filing for Chapter 7 bankruptcy, you may need to sign a mortgage reaffirmation agreement form in order to keep your home. In a Chapter 7 bankruptcy, your debts are discharged, which means you are no longer responsible for paying them. However, your mortgage is a secured debt, which means that the lender has a lien on your property. If you want to keep your home and continue to make mortgage payments, you will need to sign the form.
If you are filing for Chapter 13 bankruptcy, you may not need to sign a mortgage reaffirmation agreement form, but you may want to in order to protect your credit score. In a Chapter 13 bankruptcy, you will be required to make payments to your creditors for three to five years. If you are current on your mortgage payments, you can continue to make them outside of the bankruptcy plan. However, if you don`t sign the form, your lender may report your payments as late or delinquent, which can hurt your credit score.
How to fill out a mortgage reaffirmation agreement form
Filling out a mortgage reaffirmation agreement form is relatively simple. Here are the steps you`ll need to follow:
1. Read the form carefully: The form will include information about your mortgage, including the amount owed, the interest rate, and the monthly payment.
2. Decide whether you want to reaffirm: Consider whether you want to continue to make mortgage payments. If you`re not sure, talk to a bankruptcy attorney.
3. Sign the form: If you decide to reaffirm, sign the form and file it with the court.
4. Wait for approval: The court will review the form and approve it if it meets the requirements.
By signing a mortgage reaffirmation agreement form, you can keep your home and protect your credit score during bankruptcy proceedings. Talk to your bankruptcy attorney to learn more about the process and to make sure you`re making the right decision for your financial situation.