Ready to say goodbye to student loan debt for good? Learn More
2020 Best Invention

Can I Reaffirm My Mortgage in a Chapter 7 Bankruptcy?

3 minute read Upsolve is a nonprofit tool that helps you file bankruptcy for free. Think TurboTax for bankruptcy. Get free education, customer support, and community. Featured in Forbes 4x and funded by institutions like Harvard University so we'll never ask you for a credit card. Explore our free tool

In a Nutshell

The reaffirmation of mortgage debts is possible in Chapter 7 bankruptcy but it's not necessary. Learn what a reaffirmation agreement is how it affects your home mortgage.

Written by Attorney Serena Siew
Updated April 15, 2021

Just as car loans are secured by the vehicle, mortgages are secured by a plot of land or a home. These are items that creditors can repossess or foreclose on if you don’t make all of your payments. In a reaffirmation agreement, people filing for bankruptcy agree they’ll continue to pay back secured creditors. 

Mortgage lenders are “secured” creditors because they can reclaim your property if you default on the loan. On the other hand, unsecured debt like credit cards and student loans are not backed by tangible property. 

The Bankruptcy Code requires the reaffirmation of debts secured by personal property (like car loans) and gives filers the option to voluntarily reaffirm their mortgage debt. Here’s what this means for you. 

How Does A Bankruptcy Affect My House?

Real estate is a valuable asset that must be listed in the papers filed with the bankruptcy court. These documents or “schedules” give the bankruptcy court an overall picture of the filer’s financial situation. The mortgage on your home is especially important because it is a “secured” debt. That is, your house acts as the “security” in case you cannot pay. 

Before 2005, filers could keep their cars and other personal property as well as real property like their home as long as they kept current on their loans. In 2005, Congress eliminated this “ride-through” option for personal property like cars, but not for real estate mortgages.

Chapter 7 Bankruptcy and Mortgages

The goal of filing for Chapter 7 bankruptcy is to have your debts discharged so that creditors can no longer take collection action against you. While the automatic stay temporarily stops creditors from hounding you, a bankruptcy discharge makes that protection permanent and gives you a legal mechanism to enforce the protection. You can sue creditors that try to collect on discharged debts. 

A mortgage, although “secured,” is still a debt and thus may be discharged like the rest. Once forgiven, you are “absolved” and no longer personally responsible for paying the mortgage. Reaffirmation agreements, on the other hand, keep filers personally liable for making mortgage payments, even after a discharge. They essentially revive the mortgage as if the person had never filed for bankruptcy. 

Reaffirming a Mortgage

Mortgage companies argue that reaffirming a mortgage is the best way to ensure that your payments are reflected on your credit report, though there’s nothing that says you have to reaffirm a loan for them to report your payments. Secured creditors will defend reaffirmation agreements as “win-win” although it is more a victory for them. In fact, some mortgage lenders refuse to refinance without a reaffirmation agreement. Although this may violate the stay on collections that comes with a bankruptcy discharge, it is ultimately up to the courts to decide. 

If you’re looking to refinance with a different bank, you can ask your mortgage lender for a payment history, but the new bank you’re working with may not give it as much weight as they would a credit bureau’s history of payments.

So as not to upsell reaffirming a mortgage, remember that living in your house during bankruptcy proceedings is not like getting your cake and eating it, too. Despite being the only point of having cake--or a home--remember that mortgages are the largest chunk of secured debt.

Reaffirmation agreements confirm a person’s responsibility for paying that burden, even after discharge of other debts. Filers who default will still owe the “deficiency balance” left on the mortgage note. A deficiency judgment allows banks to sue filers for the outstanding balance after a foreclosure sale. Debtors must file a new bankruptcy case to keep this from happening. 

The Bankruptcy Court and the Reaffirmation of Mortgages

Judges ultimately decide whether to approve reaffirmation agreements on real property. Their stance on reaffirmation of mortgages, in turn, depends on the state. Bankruptcy courts across the country are split on the issue. In some states, reaffirming a mortgage is routine and judges gladly approve the agreements. In others, judges can dress down bankruptcy lawyers for even floating the idea. New Jersey and New York are examples. In such states, no attorney would prepare much less file a reaffirmation agreement destined to be rejected by the court. 

If your mortgage company is telling you that all borrowers agree to mortgage reaffirmations, now you know this is false. If you’re worried about what to do, consult a local bankruptcy lawyer who practices in that area. A law firm can tell right away whether mortgage reaffirmation in your state is wise.

What if My Court Won’t Let Me Reaffirm the Mortgage?

Judges who refuse to approve reaffirmation agreements for real estate mortgages often do so out of concern for the filer. After all, there is nothing in the bankruptcy laws that requires a reaffirmation for your home loan. They do this to protect filers from the potential disaster if they can’t make the mortgage for some reason going forward and might get stuck with a deficiency balance. 

Upsolve User Experiences

2,071+ Members Online
Lee Powers
Lee Powers
★★★★★ 7 hours ago
The last thing that you want to do, when you can’t pay those ridiculous credit cards, is to pay an attorney$$$$ to help to not pay those cards. This is where this organization comes in. If you look up all the paperwork that goes into filing a Bankruptcy Case it will blow your mind! Questions quickly come up like …What do I need / What don’t I need. So because my Brother had just filed $2000 with an attorney. He discovered after about this Upsolve organization, and let me say… it is a very good thing. You answer a bunch of questions it takes a while and then after they have there team Kind LAWYERS look at it couple weeks, you print out and sign and file it, I mailed it into the Court. It is important to follow their checklist, which includes the credit counseling, that all Courts Require. Thank you 🙏 Upsolve Team
Read more Google reviews ⇾
Connor Norris
Connor Norris
★★★★★ 1 day ago
thanks guys. what an amazing service. its inspiring in that its free and ultimately for the benefit of all.
Read more Google reviews ⇾
Erin Brianne
Erin Brianne
★★★★★ 1 day ago
very helpful. i couldn't have filled all that paperwork out on my own
Read more Google reviews ⇾

Let’s Summarize

Secured debts like mortgages are still debts and therefore can be discharged through bankruptcy. But, the only way to keep the item securing the debt is to continue to pay for them. Reaffirmation agreements for mortgages are possible, but not necessary. They are, however, always subject to court approval. So if your state is not keen on reaffirmation agreements, no mortgage company should require one to refinance. Remember that for every mortgage company that refuses, there are others that may approve. If refinancing is important to you, find a mortgage lender that is willing to help without a reaffirmation agreement.

Want to file Chapter 7 bankruptcy but can’t afford a lawyer? See if Upsolve’s software can help prepare forms to file yourself. If you’re a homeowner and don’t qualify to use Upsolve’s free tool, we can help you find a local bankruptcy lawyer who can advise whether you should reaffirm your mortgage. 

Written By:

Attorney Serena Siew


Serena Siew is an attorney with a specialty in immigration defense and legal writing for the general public. She is a member of the State Bar of California and admitted to practice before the California Supreme Court, the U.S. District Court for the Central District Court of Cali... read more about Attorney Serena Siew

It's easy to get help

Choose one of the options below to get assistance with your bankruptcy:

Free Web App

Take our screener to see if Upsolve is right for you.

Take Screener
12,715 families have filed with Upsolve! ☆

Private Attorney

Get a free bankruptcy evaluation from an independent law firm.

Find Attorney

Learning Center

Research and understand your options with our articles and guides.

Go to Learning Center →

Already an Upsolve user?

Read Support Articles →

Upsolve is a 501(c)(3) nonprofit that started in 2016. Our mission is to help low-income families who cannot afford lawyers file bankruptcy for free, using an online web app. Our team includes lawyers, engineers, and judges. We have world-class funders that include the U.S. government, former Google CEO Eric Schmidt, and leading foundations. It's one of the greatest civil rights injustices of our time that low-income families can't access their basic rights when they can't afford to pay for help. Combining direct services and advocacy, we're fighting this injustice.

To learn more, read why we started Upsolve in 2016, our reviews from past users, and our press coverage from places like the New York Times and Wall Street Journal.