How does go about Bankruptcy Chapter 7 and Mortgage Reaffirmation?

As long as you didn't reaffirm the mortgage, you don't owe the mortgage company any money. But walking away can come with its own price & repercussions, including being legally responsible for expenses relating to property ownership that occurred after the bankruptcy was filed, such as taxes, insurance, HOA dues, and municipal maintenance obligations. A foreclosure can damage your credit further & may even with good credit, you may be ineligible to obtain another mortgage in the future.

As you describe your situation, your best option may be to walk away from your lender.? We have experienced such situations where the mortgage is much greater than the FMV of the property, yet the bank will not negotiate what should be a reasonable mortgage. Lenders are not compelled to reaffirm loans on secured property but most do, except for large lenders regarding mortgages. If a short sale or DIL is not options for you, and the lender also must agree to such option, walking away from the property may be your best option. Realize that foreclosure may take many months, even after you receive the complaint. So you don't have to "walk away" immediately, just realize that you may live there many months; during the foreclosure process, you can continue to request some reasonable response from the lender but don't rely on any definite change of attitude from such lenders. May this information based on the facts in your inquiry help you to deal with a stressful situation,

If it was a joint filing and you did not reaffirm the mortgage, and there is no HOA fee involved, then you are okay to walk away. However, if there is an HOA, then you are liable for those fees until the foreclose is finished.

If you did not reaffirm your mortgage, your liability for it is discharged so the lender cannot come after you personally, although it can foreclose on the property. You can wait until a foreclosure occurs before moving, or you can discuss a deed in lieu of foreclosure with the lender, which may (in some cases) give you some financial assistance in moving (sometimes called "cash for keys") in order to save on foreclosure costs. There's no benefit to you in participating in a short sale, unless the lender is willing to allow you to stay there, rent-free, to allow time for the short sale. In any event, if you are giving up the house, there's no point in making any further payments. Save your money to cover moving costs, first & last on a rental, etc.

A reaffirmation agreement has to be filed with the bankruptcy court before discharge, so it is too late to file one. If you walk away from the house, the mortgage company probably won't come after you for the debt if you listed it in your bankruptcy schedules.

As long as you didn't reaffirm the mortgage in the chapter 7, you can walk away from the house with no financial penalty. The mortgage company will not be able to come after you for a deficiency. It is worth noting that, even if you had reaffirmed the mortgage, it is highly unusual for a mortgage lender to pursue a deficiency against a debtor. Pursuing a deficiency requires either a suit on the note, which can slow down the foreclosure process, or a confirmation of sale, which is a mini-trial that occurs after foreclosure. This usually only occurs when the debtor owns more than one home and the lender is fairly certain the debtor has lots of assets. This is because both suits on note and the mini-trial with a confirmation can be very costly. Mortgage companies realize that "you can't squeeze blood from a rock," so they usually allow you to walk away from property without any real consequences, aside from reporting a foreclosure on your credit report. Since you filed chapter 7 and didn't reaffirm, the mortgage company will not even be allowed to make a negative report on your credit history. You can walk away free and clear.