What does reaffirm a debt mean?

What does reaffirm a debt mean?

When you reaffirm a debt, it means you enter into an agreement with your lender to continue to making payments on the account rather than including it in your bankruptcy.

What is a reaffirmation agreement Chapter 7?

A reaffirmation agreement between the debtor and a creditor works by waiving the discharge of a particular debt that would otherwise be discharged in the pending Chapter 7 bankruptcy. Reaffirmation agreements can have serious drawbacks that a debtor should be made aware of.

Can I refinance my house if I did not reaffirm?

First of all, there is no legal reason at all why you can’t refinance a loan that was not reaffirmed. Reaffirmations are not required for mortgage loans and they are almost always a really bad idea. A reaffirmation agreement effectively takes the loan out of your bankruptcy discharge.

How can I reaffirm my mortgage?

A reaffirmation agreement must be signed by both parties and approved by the bankruptcy court before the discharge is entered. Once the discharge is entered, the bankruptcy judge doesn’t have the authority to sign the agreement. If you’re going to do it, best to get the process started as soon as the case is filed.

When can a reaffirmation agreement be entered into?

When Can a Reaffirmation Agreement be Entered Into? A reaffirmation agreement must be entered into before the grant- ing of a discharge and filed with the clerk of the bankruptcy court for it to be valid and binding. An executed reaffirmation agree- ment may be filed by any party, including the debtor or a creditor.

How does the reaffirmation process work in bankruptcy?

The reaffirmation process begins when the debtor discloses in the bankruptcy papers how the secured debt – loans that are backed by tangible assets – is going to be handled. It can be surrendered to the creditor, sold to pay the debt or reaffirmed.

What does it mean to reaffirm a debt?

In simple terms, reaffirming a particular debt means the individual has agreed to continue paying the debt rather than include it in the petition filed with the U.S. Bankruptcy Court.

How does a reaffirmation agreement work in chap 7?

Additionally, when you reaffirm on an installment loan, the creditor will continue to report your payments to the credit bureaus. Caveat: this includes reporting timely payments and late payments! One advantage of reaffirming a debt in Chap 7 is that you can protect your co-signer.

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