GMR22,
Hello!
I'm in the same boat (post discharge Augsut 2008). I did my own research on this and found out that many lenders avoid PDRA's (Post Discharge Retention or Reaffirmation Agreements) due to the lack of enforceability of the PDRA by the lender, "unless" they are finished before the "actual discharge". Some rulings have interpreted, that despite a new "consensual" agreement (PDRA), the Chapter 7 protections deem them (new PDRA) null and void -- since they weren't reviewed by a bankruptcy judge. Furthermore, the bankruptcy courts frown upon these agreements and deem many of them to be a form of "creditor abuse".These agreements, in effect, make the lender or creditor subject to unfavorable litigation from the debtor -- for the issue of abuse.
The courts mandate (up to 60 days after the initial filing) agreements that the court can review and/or modify themselves.Most judges and attorneys feel that the debtor is unable to make any "wise decisions" for themselves.Everything under (post discharge) Bankruptcy Code is designed to supercede the lender or creditor, and preserve the full protections for the debtor -- permanently after the discharge.I think the loophole would be a completely new loan such as buying back the property.Even then, lenders are afraid that the 'issue of abuse' may be raised.
Frankly, the lenders are afraid to be in violation of the federal bankruptcy protections, and/or be subject to litigation.Many don't want the risk of being sued! Additionally, creditors feel that they lose the benefit of a default judgement with any new agreement after discharge. By the way, your post-discharge payments are considered "voluntary"; however,the lender retains the security interest on the property and can foreclose in the event that you stop making voluntary payments.Once again, they can foreclose but "not" obtain any default deficiency judgement.
They might be able to lower your payments without a PDRA, just to keep you in your house with a payment that you can afford. Right now in this economy, lenders don't want your home and prefer to get payments instead of an empty home.A sheriffs sale and/or auction takes months,and even years in some states, and will most likely sell for pennies on the dollar.Lenders hate empty homes which are more prone to theft/vandalism and further decay from lack of maintenance.
There are so many "gray areas" that the lenders "don't want the risk' of taking.Once again, contact your attorney, but most attorneys are against PDRA'S and feel that any agreement is illegal and abusive to the debtor -- unless it was filed and approved within 60 days of filing your Chapter 7.It "might be impossible" to do a loan mod after bankruptcy.I fear the same thing for myself.
Keep us posted and let us know what your lawyer says.
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