When you filed the bankruptcy, your attorney should have sent the mortgage company a "statement of intention" which says that you wanted to reaffirm the mortgage. The mortgage company then usually sends your attorney a reaffirmation agreement which you would sign and your attorney would file with the court.
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How Reaffirmation of Debt Works. To reaffirm a debt, you and the creditor agree to the terms of the new debt in a written reaffirmation agreement, which is filed with the court. You must file two court forms: Form 27 (the reaffirmation cover sheet) and âŚ
7031 Koll Center Pkwy, Pleasanton, CA 94566. master:2022-04-19_10-08-26. When you reaffirm a debt in Chapter 7 bankruptcy, you enter into a contract with your lender (called a reaffirmation agreement) that makes you personally liable for the obligation despite your bankruptcy discharge. Many debtors reaffirm secured debts in order to keep the ...
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Do Not Sell My Personal Information. When you reaffirm a debt in Chapter 7 bankruptcy, you enter into a contract with your lender (called a reaffirmation agreement) that makes you personally liable for the obligation despite your bankruptcy discharge.
When you reaffirm a debt in Chapter 7 bankruptcy, you enter into a contract with your lender (called a reaffirmation agreement) that makes you personally liable for the obligation despite your bankruptcy discharge. Many debtors reaffirm secured debts in order to keep the asset pledged as collateral for the loan ...
Many debtors reaffirm secured debts in order to keep the asset pledged as collateral for the loan (typically a car or other motor vehicle). But in most cases, the court must approve your reaffirmation agreement at a reaffirmation hearing before it will become effective.
When a lender receives your completed reaffirmation agreement, it will file it with the bankruptcy court. The court will then schedule a hearing to discuss the reaffirmation and decide whether or not to approve the agreement. If you want your reaffirmation agreement to be approved, you must appear at your reaffirmation hearing.
(For example, if the balance of your first mortgage exceeds the value of your home, your second mortgage is technically not secure d even if the lender has a lien on the property).
Certain courts have held that if you did everything you were supposed to in order to reaffirm the debt, the lender can't foreclose on or repossess your property as long as you continue to make your regular payments. Depending on where you live, the judge may also give you a protective order to that effect.
Before you can enter into a reaffirmation agreement, you'll need to be current on the loan. Also, you must be able to protect all of the equity in the property with a bankruptcy exemption.
Because reaffirming a debt comes with the disadvantage of leaving you in debt after your bankruptcy case ends, you should consider it only if: 1 the creditor insists on it 2 it's the only way to keep collateral that you need, and 3 you have good reason to believe you'll be able to pay off the balance.
Bankruptcy helps you get out of debt by breaking the contract between you and your creditors. Sometimes, however, you'd like to keep a loan in placeâespecially if you want to retain the property securing the debt, such as a car. Reaffirmation is the process wherein you agree to remain responsible for a debt so that you can keep ...
By contrast, for most people, it's not a good idea to reaffirm a debt for more than what it would cost you to replace the property.
Also, you must be able to protect all of the equity in the property with a bankruptcy exemption. If you can't exempt all of the property's equity, the trustee will likely sell the asset and use the proceeds to pay your unsecured creditors. (For more information, see Secured Debts in Chapter 7 Bankruptcy: An Overview .)
However, not all creditors require a borrower to provide security when making a loan or when providing a service on credit. An "unsecured" creditor doesn't have a lien interest in collateral, so it cannot take and sell the borrower's property to pay off the debt without doing more.
Reaffirmation provides a sure way to keep collateral as long as you abide by the terms of the reaffirmation agreement and keep up your payments. As long as you stay current on the payment, the lender won't be able to take back the property.
As you may know, Chapter 7 bankruptcy is also called liquidation bankruptcy, which refers to the fact that a debtorâs assets (or those assets that are not exempt) are liquidated in order to repay creditors.
In short, a Chapter 7 debtor should never sign a reaffirma tion ...
Once the debtorâs estate has been liquidated, she or he can be eligible to receive a discharge of her debts. In practical terms, this means that any non-exempt property is sold, the proceeds are used to pay off debts inasmuch as possible, and then the debtor gets a clean slate for any debts that are dischargeable.
In practical terms, this means that any non-exempt property is sold, the proceeds are used to pay off debts inasmuch as possible, and then the debtor gets a clean slate for any debts that are dischargeable.
In short, it means you tell the creditor that you will continue to pay on the debt you owe even after you file for bankruptcy and receive a discharge. The creditor will not be paid from the liquidation of the debtorâs assets, and instead the debtor will continue to make payments to the creditor.
The creditor will not be paid from the liquidation of the debtorâs assets, and instead the debtor will continue to make payments to the creditor. When a debtor signs a reaffirmation agreement, she or he typically still can receive a discharge of any other eligible debts.
When a debtor signs a reaffirmation agreement, she or he typically still can receive a discharge of any other eligible debts. The reaffirmation agreement essentially creates a new contract for the debt between the debtor and the creditor.
When you receive a Chapter 7 bankruptcy discharge, most of your debts go away, including credit card debts, mortgage, even your car note. The catch is, if you have secured debt, bankruptcy only eliminates your obligation to pay. Your creditors still have the right to seize the property in most circumstances. By reaffirming a debt, it's removed ...
You may not need to reaffirm your house payment or car note, even if you want to keep your house or car. All states allow you to keep some of your property even in a Chapter 7 bankruptcy by declaring an exemption. The amount of the exemption varies from state to state.
It's actually called "reaffirmation," and yes, you may be able to keep your property that way, but there are risks involved.
However, once you file Chapter 7 bankruptcy, you can't file again for eight years.
However, once you file Chapter 7 bankruptcy, you can't file again for eight years. That means that your mortgage lender could put you on the street, or the car dealer could repossess your ride, and you would still be on the hook financially until you paid off the debt.
Your creditors still have the right to seize the property in most circumstances. By reaffirming a debt, it's removed from the discharge, which means you are still obliged to keep making payments. Reaffirmation doesn't apply to Chapter 13 bankruptcy, which restructures your debts rather than wiping them out.
By reaffirming a debt for, say, your house or your car, you make an agreement with your creditor to continue making payments in exchange for keeping your house or your car. However, you have to be current in your payments when you make the offer to reaffirm, or the bankruptcy trustee will probably nix the idea.
When you take out a loan to buy a car, you give the lender a security interestâor a lien âin the vehicle. The lien allows the lender to take the vehicle to satisfy the debt if you stop paying on it.
You Must Pay the Car Loan to Keep the Car. When you take out a loan to buy a car, you give the lender a security interestâor a lien âin the vehicle. The lien allows the lender to take the vehicle to satisfy the debt if you stop paying on it. Filing for Chapter 7 bankruptcy wipes out the contract that obligates you to pay the car lender, ...
To reaffirm a car loan, you must be able to show the court that the vehicle is necessary and that the payment is reasonable. You must also be able to show that the car payment isn't an undue hardship on your household (you'll still be able to afford the necessities of life). Effect of a reaffirmation agreement.
You can keep your car as long as you keep making the payments. However, if you default on the payments, the lender can repossess it and sell it at auction, and you'll be responsible for any remaining balance due under the loan agreement (called a deficiency balance), as well as auction fees. Canceling a reaffirmation agreement.
However, if you default on the payments, the lender can repossess it and sell it at auction, and you'll be responsible for any remaining balance due under the loan agreement (called a deficiency balance), as well as auction fees. Canceling a reaffirmation agreement.
Pros and Cons of Reaffirmation. The benefits of reaffirmation include: You secure your interest rate and payment. After a Chapter 7 bankruptcy, obtaining a car loan isn't impossible, but your interest rates will be high, and you will likely only be able to obtain financing through a subprime lender.
If you reaffirm the loan and miss payments after your bankruptcy is over, you'll be liable for the loan, including any deficiency balance remaining after the lender repossesses the car and sells it at auction. If you don't reaffirm the loan and surrender the vehicle, however, you won't be liable for a deficiency balanceâit will be wiped out in ...
You must include all debt, including your home mortgage. This obligation is on you. Normally the lender will send a reaffirmation letter offer to you or your attorney. However, it is not required. Your lender is not accurate that they cannot solicit a reaffirmation agreement. I see it all the time.
The bankruptcy discharged the debt as to you, your co-borrower remains 100% responsible for payment of loan. How will a foreclosure effect the co-borrower depends on more facts not disclosed in the question. Report Abuse. Report Abuse.
The lien securing your loan against the house is not discharged by a bankruptcy discharge; so, no free house that way. This is a frequent question as to cars and homes, but the answer remains that if you want to keep the collateral, you have to keep paying the loan secured by the collateral.
Your attorney has answered your question. for some reason you do not believe your attorney. it is the creditor's responsibility to generate a reaffirmation as the creditor has the information required, not the attorney.
Normally the lender will send a reaffirmation letter offer to you or your attorney. However, it is not required. Your lender is not accurate that they cannot solicit a reaffirmation agreement. I see it all the time. Debtor's counsel never solicit reaffirmation agreements. I advise my clients not to sign them.
The Texas constitution says you cannot be held personally liable on a mortgage. Therefore, many Texas bankruptcy judges will not approve reaffirmations and the whole debate is meaningless. Report Abuse.
If you continue to make the payments, the mortgage company can't foreclose. Report Abuse. Report Abuse. Please explain why you are flagging this content:
The reaffirmation provisions are hopelessly flawed. Before 2005 reaffirmation was simple. The debtor signed a relatively short form if he wanted to reaffirm a secured debt. The form had plenty of disclosures on it. It worked just fine for over two decades. And then came the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act (âBAPCPAâ).
The crowning jewel of section 524 is the concept of âundue hardship.â Under the new, 2005 rules, undue hardship is presumed to exist where the debtorâs expenses exceed his income.
Because of this certification requirement, attorneys across the country often refuse to sign reaffirmation agreements on the basis that they are not in a position to determine whether the debtor can make the future payments, and therefore do not want to assume liability for certifying the ability to repay a debt .
The act does not require an attorney sign the agreement, but if the attorney does sign, then the signature must include the certification. So because neither of these two things happen with much frequency, reaffirmation agreements usually donât get entered.
So because neither of these two things happen with much frequency, reaffirmation agreements usually donât get entered. But because the debtor signed the agreement, heâs done everything thatâs required of him, and the creditor canât repossess the collateralâalmost always the debtorâs car.
The result of the ill-fated tinkering with section 524 is that debtors enter into reaffirmation agreements far less frequently and that courts, now being required to approve reaffirmation agreements when not âcertifiedâ by the bankruptcy lawyer, almost never approve them.