Do we lose all the equity in our home if we do not reaffirm the mortgage in bankruptcy?

No, it’s still your home and your equity. The only thing that reaffirmation does is keep it on your credit.

I had a client contact me today because Wells Fargo never filed the reaffirmation agreement that we signed 6 months ago. She was worried, because it sounds like a big deal. Thankfully, it’s really not (and probably for the best).

Here is my email response to her:

what if they didn’t reaffirm?

Robert Payne
3:10 PM (2 minutes ago)

I know that they’ll get back to you next week, but this is going to be stewing in your mind all weekend.

When we filed the bk, we filed a Statement of Intention stating clearly that you wanted to reaffirm. After we file that, they are supposed to prepare a reaffirmation, send it to us, we sign it, send it to them, they sign it, and then they file it.

So what happens if they do NOT file it?

Not much.

The mortgage will not report on your credit, which is bad. But, you can refinance with another lender if you want the credit reporting.

Otherwise, it’s still your home. Every payment you make pays down the mortgage, and you do get credit for it. If you pay off the home, you get the title. If you sell the home, you keep the equity because you are on title.

The only problem with no reaffirmation is the credit reporting.