Question: Is A Reaffirmation Agreement Necessary?

What happens if I don’t reaffirm my mortgage?

If you do not reaffirm the mortgage, your personal liability for paying the debt represented by the promissory note is discharged in your bankruptcy case.

The company can foreclose the mortgage and force a foreclosure sale if you stop making payments..

Is a reaffirmation agreement required?

Reaffirmation agreements are strictly voluntary. A debtor is not required to reaffirm any of his or her debts. If a debtor signs a reaffirmation agreement, the debtor agrees to pay a debt that otherwise might be discharged in his or her bankruptcy case.

Can I keep my car without reaffirming?

You can choose to keep the car and continue paying without reaffirming. You take your chances that the lender will repossess the car, but you also keep the benefits of the bankruptcy discharge.

Can I trade in my car after reaffirmation?

The reaffirmation agreement obliges you to pay the full amount set forth in the reaffirmation document. You can trade in your car if you get enough from it to pay off the reaffirmed debt which is not a frequent occurrence.

How soon can I buy a car after filing Chapter 7?

How long do I have to wait after Chapter 7 bankruptcy to buy a car? Though it’s possible to apply for a car loan after your Chapter 7 discharge, that could take awhile: cases generally last a total of about 3 to 5 months from the date of filing to the day your debt is discharged.

What does reaffirming mean?

To reaffirm something is to state or confirm it again. It can also mean to uphold, maintain, or stand by something. The word is sometimes used in a legal context to refer to a court upholding a ruling or a precedent. The words affirm and confirm are also used in such cases.

When can you reaffirm a car loan?

When you reaffirm a car loan in bankruptcy, you sign an agreement with the lender that you will continue to pay for the car as if you had not filed bankruptcy in exchange for keeping it. To reaffirm a car loan, you must be able to show the court that the vehicle is necessary and that the payment is reasonable.

What’s another word for reaffirm?

Similar words for reaffirm: declare (verb) join or associate again (verb) re-create (verb) renew (verb)

What happens if you don’t sign a reaffirmation agreement?

If you do not sign a reaffirmation agreement, making on time payments will not help your credit score. … The Bankruptcy Code says that if the debtor does not sign a reaffirmation agreement on personal property, the secured creditor may repossess their collateral at any time, regardless of payment history.

Is it better to surrender your car?

Voluntarily surrendering your vehicle may be slightly better than having it repossessed. Unfortunately, both are very negative and will have a serious impact on your credit scores.

How do I get a reaffirmation agreement?

If you wish to reaffirm (agree to pay back) any particular debt, you must enter into a written agreement with the creditor, which legally obligates you to pay all or a portion of a dischargeable (wiped out by the bankruptcy) debt. The form for this is Form 240A Reaffirmation Agreement.

Will I lose my car in Chapter 7?

The motor vehicle exemption helps you keep your car, truck, motorcycle, or van in Chapter 7 bankruptcy by protecting equity in a vehicle. … If you’re behind on your car loan, you can’t keep your car unless you work out a plan to bring your payments current before you file for bankruptcy (more below).

How does reaffirmation work?

Reaffirmation is the process wherein you agree to remain responsible for a debt so that you can keep the property securing the debt (collateral). You and the lender enter into a new contract—usually on the same terms—and submit it to the bankruptcy court.

Can you file a reaffirmation agreement after discharge?

Reaffirmation agreements must be signed before the debtor gets his discharge in the bankruptcy. … The debtor must then file a motion to reopen the bankruptcy case, then file a second motion to vacate the discharge, then file the reaffirmation agreement with the court. Most courts will not allow debtors to do this.

Can you negotiate a reaffirmation agreement?

When making an offer on a reaffirmation agreement, ask the lender to reduce the loan balance and the interest rate. Remember, this is a negotiation. You can expect the lender to come back with a counter offer. So, make your starting offer lower than the amount you are really willing to pay.

What happens if I don’t reaffirm my car loan?

If you don’t sign a reaffirmation agreement, the lender can repossess your car after your case closes and the automatic stay lifts. Some car lenders are known to repossess the car immediately, even if you are current on payments.

What happens at a reaffirmation hearing?

What Happens at a Reaffirmation Hearing? At the reaffirmation hearing, the judge will explain any concerns he or she has with the terms of your agreement. In addition, the judge will ask you certain questions to determine whether reaffirming the debt is in your best interest.