Reaffirmation and Credit Report

[CCareEvil]

I am a bit confused. Does it make any difference to your credit report/rating whether you reaffirm a debt or not? Is there any difference on credit report whether you sign the letter or just continue to make paymenys?

Also, do you have to affirm the debt at the current terms , or could I negotiate something different? The bank would lose money if I surrendered my car now, would they offer me slightly lower payments or shorter payoff to get me to keep it?

Thanks a bunch.

[HHM]

Are you talking about reaffirming unsecured debt or secured debt.

On secured debt, you typically have to reaffirm on the same terms. However, so long as you are current on your payments and continue to make the payments, you don't need a reffirmation agreement, and no, a reaffirmation agreement makes no difference on your credit report.

[Luna]

I am a bit confused. Does it make any difference to your credit report/rating whether you reaffirm a debt or not? Is there any difference on credit report whether you sign the letter or just continue to make paymenys?

Also, do you have to affirm the debt at the current terms , or could I negotiate something different? The bank would lose money if I surrendered my car now, would they offer me slightly lower payments or shorter payoff to get me to keep it?

Thanks a bunch.

Speaking from personal experience.....it DOES make a difference on your credit report if you SIGN a Reaffirmation or not. If you DO sign a Reaffirmation...your tradeline is noted "Included in BK- Reaffirmed Debt". Once it is noted as such...your continued payment history IS REPORTED and as long as you are ON TIME it will continue as a "Satisfactory Account". If you do NOT sign a Reaffirmation and just continue to make payments...the tradeline will only show as "Included or Discharged in BK" and they will NOT report any payment history..because it is a DISCHARGED debt and they are not permiited by law to report anything more after the BK filing date on such an account of this categorization.

Again, from personal experience, a creditor MAY change your terms in order to allow you to Reaffirm the debt. They can raise your interest rate to a default rate and give you a different timeline to pay off the debt. The creditor is also able to negotiate a Redemption for a "fair market value" repayment plan. In the case of automobiles, a creditor MAY renegotiate for you to repay whatever the vehicle is worth..which may be much less than your loan payoff.

Reaffirming is basically recommitting legally by contract to the amount owed on the debt without BK protection and continuing the CB reporting.

Redeeming is renegotiating the debt by reducing the amount owed to being only what the vehicle is worth.

Everything is done at the discretion fo the Creditor. Some creditors, like Credit Unions, REQUIRE a signed Reaffirmation while other lenders may not require them as long as you continue to pay ON TIME.

Still..whether or not you earn a Positive Satisfactory tradeline or Discharged negative tradeline depends on whether or not you sign a Reaffirmation. Reaffirmations are also only legal if presented and approved as being within your best interests to repay by the BK Court..and entered into your BK record.

Note: I signed a Reaffirmation, paid my loan off on time perfectly, had continued POSITIVE reporting as a result. And...a few months after it was paid off in full, on time....I wrote a shmoozy GoodWill Letter and the Creditor removed ALL notations of BK.

[BrokeCh7]

And...a few months after it was paid off in full, on time....I wrote a shmoozy GoodWill Letter and the Creditor removed ALL notations of BK.

Could you post a simple version of the shmoozy letter? All i get from my reafirmed crediters is no reporting and lawyers to talk to.