Each day our Oklahoma Lawyer explains reasons to reaffirm. Almost every new client who wants to file chapter 7 bankruptcy in Oklahoma doesn’t want to file “against” something. What the client means to say is that they would like to keep their house, or their car. When filing bankruptcy, it is impossible to “not file against” an item that you would like to keep. There is, however, a legal tool that can keep these items in your possession: reaffirmation.
Understanding Reaffirmation Agreements
A reaffirmation agreement in bankruptcy is a brand new contract a you sign with a creditor or lender. The contract reaffirms the debt along with your continued liability for the underlying debt. In layman’s terms: a reaffirmation agreement is a new agreement between you and the lender. The agreement allows you to keep the secured property so long as you continue to make your payments.
Listing Your Debt
In bankruptcy, the burden is put on you to list all of your debt. A list of your debt is put into the bankruptcy petition. When you list the debt its sorted in to secured and unsecured debt. The secured debt gives you the chance to reaffirm the debt or to surrender the collateral. Its your choice but there are certain obligations you owe when you reaffirm it.
Keep The Secured Property
In order to stop the secured creditor from taking the secured property you have to decide what you want to do. You can either retain and continue to pay for the monthly obligations or enter into a reaffirmation agreement. If you enter into a reaffirmation it must be filed and approved by the bankruptcy court.
In weighing the advantages and disadvantages of a reaffirmation you should consider all the options. The first optimistic view is to sign the reaffirmation agreement. You can use it as a tool to start fresh and begin rebuilding you credit. This is because payments on reaffirmed debts get reported to the credit bureaus.
Decide Whats Best For You
The pessimist side of you should consider the possibility that you cant make the payments in the future. If this is what happens and you signed the agreement you’re back in trouble again. On the other hand if you didn’t sign the agreement and you run into trouble you’re not in trouble for the debt. You simply return the collateral and its over. Keep in mind that if you don’t sign your payments aren’t reported to the credit bureau. Also, not all creditors allow you to simply continue making payments. Some demand that you sign the agreement.
Bankruptcy Attorneys Near You
Each day our Oklahoma Lawyer explains reasons to reaffirm. With thousands of bankruptcy cases filed in Oklahoma we can help you. The truth is that you don’t have to go it alone. The process isn’t as hard as it seems. But it requires the help from a skilled professional. Call today and get a free bankruptcy consultation.