Reaffirmation Agreements

Reaffirmation Agreements

An Option For Keeping Your Property In Chapter 7

You may have filed for Chapter 7 liquidation which requires you to sell some of your property and assets. Unsecured debt, which has no collateral associated with it and nothing that can be repossessed by lenders, is typically discharged in Chapter 7. Secured debt, like auto loans and home loans, for instance, are typically nondischargeable. Your bankruptcy filing may require you to sell some of these types of assets to appease the creditors who hold your secured debt. There are options however.

Our attorneys will analyze your situation and let you know if a reaffirmation agreement is feasible. Not everyone will qualify for such an agreement but our attorneys have decades of experience helping clients keep their property and assets even in the midst of liquidation.

If you have fallen behind on auto payments or your mortgage and you want to keep the property after filing a Chapter 7 bankruptcy, a reaffirmation agreement may be the solution. By reaffirming the debt you owe, you may keep any recently purchased personal property if you can make the payments. If you have fallen significantly behind on these payments and catching up does not seem reasonable, you may be forced to lose your property.

When you discuss your situation with us, we will do all we can to help but we will also be completely candid with you about the risks of reaffirmation agreements. Our goal is to help you achieve long-term debt relief.

How Can You Reaffirm Your Debt

Since home mortgages, car loans and similar kinds of debt are considered secured debt, the lender or their collection agency can take the property from you through foreclosure or repossession if you violate terms of the loan. Through debt reaffirmation, you may be able to avoid this by entering into a new contract with your lender. The new contract will affirm that the property loan will be paid off and the debt will not be discharged through bankruptcy.

While this may seem attractive and we can be your guides through the process, there are risks. By entering into the reaffirmation agreement, you will be personally liable for the debt despite your bankruptcy relief. If you cannot make the payments, you will likely lose your property and inflict considerable damage to your credit and your ability to get loans in the future. By filing Chapter 7 bankruptcy, you may qualify for a reaffirmation agreement, and we will guide you through the risks and rewards of such an agreement.