{"id":3187,"date":"2021-02-22T16:56:21","date_gmt":"2021-02-22T16:56:21","guid":{"rendered":"https:\/\/hsapclaw.com\/?p=3187"},"modified":"2023-04-28T06:54:18","modified_gmt":"2023-04-28T06:54:18","slug":"bankruptcy-101-reaffirmation-agreement","status":"publish","type":"post","link":"https:\/\/hsapclaw.com\/bankruptcy-101-reaffirmation-agreement\/","title":{"rendered":"Bankruptcy 101: Reaffirmation Agreement"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">At the end of a bankruptcy case, you have to option to reaffirm your debt, essentially agreeing to pay it if it would have been discharged. In this article, we\u2019ll discuss secured debt and reaffirmation for Bankruptcy Chapter 7.\u00a0<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Chapter_7_Overview\"><\/span><span style=\"font-weight: 400;\">Chapter 7 Overview<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2><div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<label for=\"ez-toc-cssicon-toggle-item-6629bb0e264c0\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6629bb0e264c0\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/hsapclaw.com\/bankruptcy-101-reaffirmation-agreement\/#Chapter_7_Overview\" title=\"Chapter 7 Overview\">Chapter 7 Overview<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/hsapclaw.com\/bankruptcy-101-reaffirmation-agreement\/#Dealing_With_Secured_Debt\" title=\"Dealing With Secured Debt\">Dealing With Secured Debt<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/hsapclaw.com\/bankruptcy-101-reaffirmation-agreement\/#Pros_and_Cons_of_Reaffirming_Debt\" title=\"Pros and Cons of Reaffirming Debt\">Pros and Cons of Reaffirming Debt<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/hsapclaw.com\/bankruptcy-101-reaffirmation-agreement\/#Pros\" title=\"Pros\">Pros<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/hsapclaw.com\/bankruptcy-101-reaffirmation-agreement\/#Cons\" title=\"Cons\">Cons<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/hsapclaw.com\/bankruptcy-101-reaffirmation-agreement\/#How_Reaffirmation_of_Debt_Works\" title=\"How Reaffirmation of Debt Works\">How Reaffirmation of Debt Works<\/a><\/li><\/ul><\/nav><\/div>\n\n<p><span style=\"font-weight: 400;\">A <a href=\"https:\/\/hsapclaw.com\/chapter-7-bankruptcy\/\"><strong>Chapter 7 Liquidation Bankruptcy<\/strong><\/a> is a reprieve for Americans who are drowning in debt and are receiving harassment from debt collectors. When you <a class=\"linkilo_keyword_link  hyperlinks\" href=\"\/how-often-file-bankruptcy\/\"  rel=\"dofollow\" title=\"file bankruptcy\" data-linkilo-keyword-link=\"linked\">file bankruptcy<\/a>, a court order known as an automatic stay prevents any further efforts by collection agencies to collect the amount owed. To qualify for this, you need to take the means test.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">After the bankruptcy case is over, most debt will be wiped out (discharged) and you\u2019ll no longer have personal liability. Some kinds of debt like child support or tax debt are <a href=\"\/chapter-7-bankruptcy-exemptions\/\">exempt and cannot be discharged in bankruptcy<\/a>.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">While secured creditors can no longer sue you for the debt after bankruptcy, they still have a lien on the property that secured the debt. That means that even if you no longer have personal liability to repay the debt, the creditor can still repossess the collateral. A reaffirmation agreement may let you keep the property even after bankruptcy. Contact a bankruptcy attorney for more information.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Dealing_With_Secured_Debt\"><\/span><span style=\"font-weight: 400;\">Dealing With Secured Debt<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-3189 size-medium alignright\" src=\"https:\/\/hsapclaw.com\/wp-content\/uploads\/2021\/04\/Reaffirmation-Agreement-300x300.jpg\" alt=\"Reaffirmation Agreement\" width=\"300\" height=\"300\" srcset=\"https:\/\/hsapclaw.com\/wp-content\/uploads\/2021\/04\/Reaffirmation-Agreement-66x66.jpg 66w, https:\/\/hsapclaw.com\/wp-content\/uploads\/2021\/04\/Reaffirmation-Agreement-150x150.jpg 150w, https:\/\/hsapclaw.com\/wp-content\/uploads\/2021\/04\/Reaffirmation-Agreement-200x200.jpg 200w, https:\/\/hsapclaw.com\/wp-content\/uploads\/2021\/04\/Reaffirmation-Agreement-300x300.jpg 300w, https:\/\/hsapclaw.com\/wp-content\/uploads\/2021\/04\/Reaffirmation-Agreement-400x400.jpg 400w, https:\/\/hsapclaw.com\/wp-content\/uploads\/2021\/04\/Reaffirmation-Agreement-600x600.jpg 600w, https:\/\/hsapclaw.com\/wp-content\/uploads\/2021\/04\/Reaffirmation-Agreement.jpg 626w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/> A debtor can redeem the property by paying for what it\u2019s worth. However, most cannot afford to do this, having been swamped by plenty of secured and unsecured debts.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Alternatively, a debtor can get into a reaffirmation agreement with the creditor. This means that they agree that the amount is still owed once bankruptcy has ended.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Reaffirmation contradicts the main purpose of bankruptcy. The bankruptcy process aims to provide <a class=\"linkilo_keyword_link  hyperlinks\" href=\"\/bankruptcy-attorneys\/when-to-file-bankruptcy\/\"  rel=\"dofollow\" title=\"debt relief\" data-linkilo-keyword-link=\"linked\">debt relief<\/a> by eliminating debts, which gives Americans a fresh start. It\u2019s only ever used by debtors who want to <a class=\"linkilo_keyword_link  hyperlinks\" href=\"\/stop-foreclosure\/\"  rel=\"dofollow\" title=\"stop foreclosure\" data-linkilo-keyword-link=\"linked\">stop foreclosure<\/a> or repossession to keep a certain item. Bankruptcy law requires judges to scrutinize and approve these agreements. For more bankruptcy help, contact an expert in bankruptcy laws.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Pros_and_Cons_of_Reaffirming_Debt\"><\/span><span style=\"font-weight: 400;\">Pros and Cons of Reaffirming Debt<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Before reaffirming a secured debt, consider the advantages and disadvantages.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Pros\"><\/span><span style=\"font-weight: 400;\">Pros<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">You can keep the property that secures the debt<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">You are not required to pay one big lump-sum just to keep the property<\/span><\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Cons\"><\/span><span style=\"font-weight: 400;\">Cons<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">You are accountable to pay an amount that may otherwise be discharged debt.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">You can lose the property if the creditor decides to repossess it if you cannot make payments.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">You will have to wait 8 years after filing the initial Chapter 7 bankruptcy before you can file another one to wipe out this debt.<\/span><\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"How_Reaffirmation_of_Debt_Works\"><\/span><span style=\"font-weight: 400;\">How Reaffirmation of Debt Works<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Agreement of the terms of the reaffirmation happens in court. The two court forms to be filed are Form 240A and Form 27. If it\u2019s a big creditor, they\u2019ll usually be the ones handling the paperwork. They\u2019ll simply ask you to sign the documents.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">After filing, a judge will decide in a hearing on the approval of the reaffirmation. If the reaffirmation seems to be harmful to you or it will cause undue hardship, the court will disapprove of it.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The court will likely disapprove reaffirmation for the following reasons:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">the interest rate in the agreement is too high,\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">the loan isn&#8217;t secured<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">the property is worth significantly less than the balance of the loan you want to reaffirm<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">you will not have enough money left after your living expenses to pay back the agreement<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">If you want to reaffirm your debt, talk to an expert attorney first. Our <a href=\"https:\/\/hsapclaw.com\/\"><strong>bankruptcy lawyers<\/strong><\/a> at <strong>Hammerschmidt Stickradt &amp; Associates<\/strong> can help you examine all options available.\u00a0 Call us now at 248-600-4536 for a free initial consultation.\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>At the end of a bankruptcy case, you have to option to reaffirm your debt, essentially agreeing to pay it if it would have been [&hellip;]<\/p>\n","protected":false},"author":8,"featured_media":3190,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"_links":{"self":[{"href":"https:\/\/hsapclaw.com\/wp-json\/wp\/v2\/posts\/3187"}],"collection":[{"href":"https:\/\/hsapclaw.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hsapclaw.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hsapclaw.com\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/hsapclaw.com\/wp-json\/wp\/v2\/comments?post=3187"}],"version-history":[{"count":7,"href":"https:\/\/hsapclaw.com\/wp-json\/wp\/v2\/posts\/3187\/revisions"}],"predecessor-version":[{"id":4188,"href":"https:\/\/hsapclaw.com\/wp-json\/wp\/v2\/posts\/3187\/revisions\/4188"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/hsapclaw.com\/wp-json\/wp\/v2\/media\/3190"}],"wp:attachment":[{"href":"https:\/\/hsapclaw.com\/wp-json\/wp\/v2\/media?parent=3187"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hsapclaw.com\/wp-json\/wp\/v2\/categories?post=3187"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hsapclaw.com\/wp-json\/wp\/v2\/tags?post=3187"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}