Mortgage loan not reaffirmed in bankruptcy by lawyer error. This makes our credit rating even worse-now what?

Deal Score0

We filed BK-7 in Kansas b4 the new laws took effect. Our attorney knew we wanted 2 reaffirm our home loan and we signed the Stmt of Intent form and it is noted in the creditor matrix. After we rcv’d a discharge we assumed our home loan was reaffirmed. WRONG! The ball got dropped by our attny and/or Wells Fargo so the loan got DISCHARGED in error. We’ve made our payments on this loan faithfully b4 and after our bankruptcy because we knew we wanted it reaffirmed and we thought it was reaffirmed for the last 2 years! Now Wells Fargo just shows our loan as DISCHARGED IN BK-7. We have filed 3 credit report disputes trying 2 get them 2 show that we’ve paid our pmts on time 2 help boost our credit rating and they keep side stepping our request. We are in the process of trying 2 sell this house and it is sitting on the not-so-good RE market. WHAT HAPPENS CREDIT WISE IF WE TELL WELLS FARGO THAT THEY CAN HAVE THEIR HOUSE BACK AND SELL IT THEMSELVES? Can our attny be held liable for this?!
The form that we signed is called a Statement of Intent form that showed our complete intention to reaffirm that debt. The lawyer basically admitted that they normally send a separate mailing regarding reaffirmation requests, and they did NOT do that in our case. And as far as us making sure that debt was reaffirmed before the discharge– we thought our lawyer took care of that for us. That is what we paid them to do. We put too much trust in them, obviously. It was indeed an error of judgement to trust them completely. You wouldn’t think you’d need to babysit your lawyer for crying out loud!
Will any sort of notes about a foreclosure be added to our credit reports if we were to walk away from our home loan, or would it just stay as “Discharged in BK-7”? We even hate to walk away from our home loan because we R trying 2 build our credit back up, but Wells Fargo refuses 2 work with us and show on our credit report that we’ve faithfully made our pmts on time b4 and after the BK!

2 repossessions, bankruptcy in 1997; late payments on mortgage and credit card in the last 12 months. one repossession has been cleared and the other one still have an outstanding balance.

  1. Reply
    January 31, 2011 at 10:28 am

    Two things,

    First, yes you lawyer can be held responsible for this slip up as long as you have copies of the reaffirmation agreement.

    Second, since Wells Fargo shows the home as included in your bankruptcy, you can walk away from the home and there is nothing they can do to you.

    Something to think about.

    Why did you not make sure this agreement was in your bankruptcy before it was discharged?

  2. Reply
    resource man
    January 31, 2011 at 10:47 am

    ouch!! try this resource they compile lenders for people in your kind of situation

  3. Reply
    January 31, 2011 at 11:33 am

    With that kind of history, why on earth do you want a personal loan? And if you were a lender, looking at that kind of history, would you be in a hurry to lend this person money? Do you like being in the pit of H*LL? Get a second job, sell stuff at a garage sale or on eBay. Pay off the second repo and then remember where you’ve been so you never get down there again.

    People get into these situations for one reason – no savings! If you keep money in the bank for emergencies, WHEN bad things happen (not IF), you have the means to take care of it. Stay away from credit – no car loans, no credit cards, no installment payments. Take care of the repo then save, save, save! Save for that USED car (NEVER, EVER buy new). Save for that new plasma HDTV. Save for … You get the idea.

    You have to learn to change your spending habits and recognize how expensive credit is. Look for a “Financial Peace University” class in your area (check the link below). Dave Ramsey is AWESOME. He really makes you look at not only WHAT you’re spending, but WHY you’re spending it. That’s the only way you can change your habits and stop this from happening again. Bankruptcy is a LOT tougher now than it was in 1997. But you DON’T have to go there.

    Good luck!

  4. Reply
    January 31, 2011 at 12:26 pm

    you probably won’t get a loan

    Leave a reply

    Register New Account
    Reset Password