As we have a house and would like to keep it, can someone explain reaffirming? Is it under the same terms as you had when you bought the house or do you work out other payment options? Any help would be great.
-
-
Reaffirmation can happen if you are current on your payments and would like to keep the property. I'm not sure if you can negotiate other rates, but usually you are reaffirming your current loan and continuing to pay what was originally negotiated. -
It's not always necessary to reaffirm a secured debt either. If you remain current on the payments, such as for a car and mortgage, the banks won't reposess or foreclose since filing Bankruptcy does not mean you are in default. However, you may not receive credit on your credit report for current payments as it MAY state "included in BK." Plus, not all attorneys will file or recommend a reaffirmation agreement. Mine strongly recommended against it and actually said that he didn't file them for his clients. There are pros and cons to both decisions.Comment
-
Reaffirmation
It is up to the creditor whether or not they will require to reaffirm the debt by way of a reaffirmation agreement. The terms may or may not be negotiable. If the interest is high our office tries to save the client money and have the interest rate reduced, this is not always possible, however you don't know if you don't try and the client is happy is we can save them anything. With a car rdemeption may be a better thing depends on the loan amount and book value of the vehicle.Comment
-
I don't agree that the creditor dictates whether or not you reaffirm a debt. Perhaps if the creditor is a credit union but they have funky rules. However, if you're using an attorney I'd definitely get their opinion on whether or not to reaffirm especially if you're current on your payments! If they advise against reaffirming the debt, they should file the notice not to reaffirm with your creditors through the court. Your creditors will have a chance to dispute that through the bankruptcy process.
Keep in mind that filing bankruptcy does NOT put your secured loan in default.Comment
-
reaff
Basically, reaffirmation means you're re-obligating yourself for the debt. If you do reaffirm and are later unable to keep up the payments, the property may be taken from you and you may be sued for any deficiency. If you don't reaffirm and choose to 'ride-through' by keeping current on payments, you may later give up the property if you need to without being liable for any deficiencies, as the underlying debt has been discharged - but the secured creditor still maintains their security interest in the property.
Whether or not reaffirmations are a requirement depends upon the district of the Fed Court of Appeals in which your state resides, generally speaking. Don't take this as gospel, but I believe that states in the 2nd, 4th, 9th and 10th circuits may use the 'ride-through' or 'retain' option concerning secured property, whereas states in the 5th, 7th and 11th require reaffirmation.
Unfortunately, this option is set to go away with the new laws 10/17, when reaffirmation will be required for all states.
http://www.uscourts.gov/courtlinks/index.cfmComment
Comment