When making an offer on a reaffirmation agreement, ask the lender to reduce the loan balance and the interest rate. Remember, this is a negotiation. You can expect the lender to come back with a counter offer. So, make your starting offer lower than the amount you are really willing to pay.
What happens if you don't sign a reaffirmation agreement? Reaffirmation agreements are voluntary, so you're not required to sign one. It's not even necessary to have one if you want to voluntarily repay a debt instead of including it in your bankruptcy.
An executed reaffirmation agree- ment may be filed by any party, including the debtor or a creditor. It must be filed within 60 days after the first date set for the first meeting of creditors in the bankruptcy case unless the deadline is extended by the bankruptcy court.
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 don't sign a reaffirmation agreement, the lender can repossess your car after your case closes and the automatic stay lifts. Some car lenders are known to repossess the car immediately, even if you are current on payments.
Reaffirming the debt gives it new life -- you're once again legally obligated to pay it. If you don't make the mortgage payments, the lender can foreclose and your bankruptcy won't stop this from happening.
The agreement is voluntary for you and for the creditor—the creditor may refuse to offer a reaffirmation. All parties need to move quickly to get an agreement reviewed, signed, and filed.
Either way - if the reaffirmation agreement is not approved, your personal liability is discharged. And - just like when the court denies approval of the reaffirmation - most lenders will simply keep everything the same, as long as you make timely payments and keep the vehicle insured.
A reaffirmation agreement shall be filed no later than 60 days after the first date set for the meeting of creditors under §341(a) of the Code.
Secured debts like mortgages are still debts and therefore can be discharged through bankruptcy. But, the only way to keep the item securing the debt is to continue to pay for them. Reaffirmation agreements for mortgages are possible, but not necessary. They are, however, always subject to court approval.
A lender may offer you a chance to reaffirm the loan because it would prefer you to continue paying back the loan. A reaffirmation agreement can be advantageous to you because: You will keep the vehicle; You may be able to negotiate more favorable terms for the loan; and.
In a Chapter 7 bankruptcy, you must disclose whether you intend to keep or surrender (give back) certain properties such as your house or car. However, even if you want to keep a property and continue paying on it, your lender may choose to take it back unless you "reaffirm" the debt.