Do you have to sign a reaffirmation agreement in bankruptcy?

Do you have to sign a reaffirmation agreement in bankruptcy?

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. There may be other ways to renegotiate payments with creditors without entering into a reaffirmation agreement.

What happens when a debtor enters a reaffirmation agreement?

When a debtor enters into a reaffirmation agreement, he or she is obligated to pay the reaffirmed debt. The reaffirmed debt is treated as if the debtor never filed for bankruptcy. As such, reaffir- mation can have significant financial consequences.

What happens to your mortgage payments when you file bankruptcy?

Those payments don’t show at all. Instead your mortgage will just show “included in bankruptcy.” “Hold on” people say, “I didn’t include my mortgage.” Actually you did. When you file bankruptcy, you “include” everything. That’s the law.

What happens to your credit when you file bankruptcy?

(Remember though to pay your home owners association!) Also, after bankruptcy late payments don’t count against your after bankruptcy credit. If you complain to the mortgage company about your credit report, they will tell you that “you should have reaffirmed your mortgage.” Reaffirming takes the house out of the bankruptcy.

Can a creditor ask you to reaffirm a debt?

The creditor has the right to ask you to reaffirm, but you are under no obligation to do so. That said, if you want to keep paying on the debt and continue receiving invoices and statements from the creditor; you’ll likely have to reaffirm the debt. Talk with your consumer finance lawyer about all your options.

What happens if you reaffirm a car loan?

As such, reaffir- mation can have significant financial consequences. For example, if a debtor reaffirms a car loan and misses a payment in the future, the creditor may be able to repossess the car and/or sue the debtor 8 | BANKRUPTCY: UNDERSTANDING REAFFIRMATION AGREEMENTS CITY BAR JUSTICE CENTER for the balance of the loan.

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