In the last several years, home lenders have started telling borrowers that they cannot get a modification of their home loan if they did not reaffirm the loan in their prior Chapter 7 case. The same representatives are apparently telling borrowers that they need to reopen their Chapter 7 case to file a Reaffirmation Agreement. There are several issues with this. First, the lender’s representative is just reading from a script and they should not be relied upon for a legal opinion. Of course they want borrowers to reaffirm their loans, as it is almost always good for the lender. Second, there is no law whatsoever that requires that you enter into a Reaffirmation Agreement before getting a modification. Finally, in most cases, it is a really bad idea to enter into a Reaffirmation Agreement for a home loan anyway and that is something that you most likely discussed with your Bankruptcy lawyer when the case was filed. That said, can a Chapter 7 Bankruptcy case be reopened to file a Reaffirmation Agreement? Probably not.
Under Bankruptcy law, a Reaffirmation Agreement must be entered into before the discharge is entered, and it must be filed no later than 60 days after the first date set for the first meeting of creditors. Because Reaffirmation Agreements are not favored by the Court, these deadlines are generally strict. Therefore, attempting to reopen a closed Chapter 7 case to reaffirm a home loan (or any other debt) is not only a bad idea, it probably will not work anyway. I will add that I have read comments that seem to leave the door open to file Reaffirmation Agreements that were actually executed on time, but not file for some reason, but I have not yet read any cases on that issue. Those situations would be few and far between anyway. If you have questions about your Chapter 7 case and the issue of a reaffirmation, your lawyer will probably be happy to answer them.