[MARTHA92]

We filed bankruptcy and included our 1st and 2nd mortgage as a reaffirmation. Well my husband got laid off and we just didn't have the money to pay for the 2nd mortgage payment. The mortgage company notified us saying that the property did not have the value for foreclosure, but that our account was turned over to their recovery department. So they told us that we had to make some sort of payment arrangements or they would attach our wages. They listed the debt on our credit report as "included with Chapter 7 bankruptcy". Are they legally allowed to continue to incur interest charges? We will never be able to pay this debt off at that rate. What options do we have?

[Fr_Chuck]

The loan was not done away with in bankruptcy, you re-affirmed it, which means you agreed to keep this loan while not paying off everyone else.

So you are still bound to the terms of the loan. Since most likely you owe so much on the first mortgage that if they foreclosed and sold the house, only the first lender would get their money, they have little ability to collect unless you pay or they get a judgement against you.

Often in bankruptcy, you need to let the house go and start clean in a nice smaller rental to get a new start. But you believed you could keep the house.

Is he working now? If so are you now making the required monthly payments, if you are, ask them for a longer period to pay off the payments that are behind, they would rather have a plan to get the money than take you to court.

Now of course think of it this way, if it is hard to pay the bills now, how hard will it be if they get 25 percent of the paycheck and all the money in your bank account.

You may wish to talk to your bankruptcy attorney and see if he can help work a deal out with them