Court Rejects Debtors’ Motion to Approve Agreement to Reaffirm Mortgage Note Where Schedules Showed Negative Monthly Income

Court Rejects Debtors’ Motion to Approve Agreement to Reaffirm Mortgage Note Where Schedules Showed Negative Monthly Income

Chapter 7 Debtors sought court approval of a reaffirmation agreement made with Lender with respect to debts secured by a mortgage on their principal residence.

The reaffirmation agreement stated that the Debtors had a monthly deficit of expense over income of $233.45 according to Debtors’ Schedules I and J. The Debtors sought to reaffirm a mortgage note in the amount of over $250,000.00. According to 11 U.S.C. § 524(m), a presumption of an undue hardship on the Debtors and their dependents arose from such an agreement.

The Court held a hearing  to determine whether the presumption of undue hardship had been rebutted.

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