Reaffirming Credit Cards

[alberto-2005]

Dear Todd & posters,

Thank you very much for your response.

Todd, please be so kind to excuse me for including a hyperlink to my question(s), so please let me paraphrase it/them without mentioning the Web-site.

Well, as a follow up to the recent thread "Reafirming Some Ceditors", I would like to ask if it is indeed possible to reafirm part of the debt from credit cards after filing for Chapter 7 as opposed to reaffirming whole debts.

Some people state that it is possible to wipe-out $1,800 on a $2,000 credit card to end up paying $200 which is the same as paying just 10% of the debt. Is this really possible with Chapter 7?

So, my question is, if I file for Chapter 7, can I reaffirm 10% on some or most of my credit cards? Or am I just limited to do this with just one credit card?

Before we go into the debate "why would you", or "why wouldn't you", I just want to know if this is possible to do from a technical point of view, so please bear with me.

Thank you for your time and attention.

Albert

[HRx]

Some creditors will allow debtors to reaffirm a percentage of a debt. This primarily occurs when the debt is excessive, and if thier internal debt collection/negotiation policies allow them to. For example, Amex may allow you to reaffirm $5,000 of a $10,000 credit card.

Good Luck!

[HHM]

In a chapter 7, all your credit card debt is eliminated, so you don't need to reaffirm. The only time that reaffirmation makes sense is if the credit card company has a good objection to the discharge of their debt, i.e. you had a major charge within 60 days of filing BK, etc.

Otherwsie, there is no reason to reaffirm because the debt will be eliminated.

[alberto-2005]

Hello, there!

Yes, HHM, credit card debt is completely eliminated with BK 7, and there is no need to reaffirm any credit cards, let alone reaffirm credit card debts in their entirity. I am talking about reaffirming a percentage from the whole of each (or some) credit card(s), like 10% or perhaps 20% on, let's say, 3 credit cards from different banks.

Todd, reaffirming $5,000 of a $10,000 credit card sounds okay to me if this applies to one credit card only. Obvioulsy, since my debt is about $80,000, paying $40,000 is too much for me for the time being. So, I prefer to stick with the $5,000 (or let's say $6,000 limit). Conclusively, the big question is, do you think it is possible to reaffirm just 3 credit cards for the amount of $2,000 on each credit credit card? Each of these credit cards have balances of more than $10,000 in debt.

Thank you for your kind assistance.

Albert

[3131tj]

just curious (I am still learning, too), but doesn't the creditor have to agree to the reaffirmation, which yours may not? What about Chapter 13 instead of 7 and seeif you can just "rework" your debt. Just a thought

[HHM]

Hello, there!

Yes, HHM, credit card debt is completely eliminated with BK 7, and there is no need to reaffirm any credit cards, let alone reaffirm credit card debts in their entirity. I am talking about reaffirming a percentage from the whole of each (or some) credit card(s), like 10% or perhaps 20% on, let's say, 3 credit cards from different banks.

Todd, reaffirming $5,000 of a $10,000 credit card sounds okay to me if this applies to one credit card only. Obvioulsy, since my debt is about $80,000, paying $40,000 is too much for me for the time being. So, I prefer to stick with the $5,000 (or let's say $6,000 limit). Conclusively, the big question is, do you think it is possible to reaffirm just 3 credit cards for the amount of $2,000 on each credit credit card? Each of these credit cards have balances of more than $10,000 in debt.

Thank you for your kind assistance.

Albert

Then why reaffirm, I don't quite understand your motivation here? Bankruptcy is not a negotiation with your creditors; unsecured debt is eliminated, no questions asked.

Technically, reaffirmations are approved by the court, so you need some reason to reaffirm, usually its to avoid an objection to discarge, but if that doesn't apply, why pay anything back if you don't have to. Its not immoral to declare bankruptcy.

If you really want to pay something back, you can always try a chapter 13 if you qualify.

[alberto-2005]

Hello, 3131tj!

Thanks for your reply.

Let me start by saying, as Todd once said (I think), that reaffirmation is done after discharge, not before. That way, you have a much more powerful barganing power as oposed to doing it before discharge. Needless to say, this is not applicable to Chapter 13 (barganing power). Of course, reaffirmation has to be approved by the debtor. Thus, if the debtors don't agree to what I am planning to propose them, I am okay with it, for I am not required by law to reaffirm anything.

Without getting into details, partially in response to HMM, I got this idea from a Web-site, but I cannot give the address here. Hence, if anybody is interested in knowing more about this, please feel free to E-mail me to my personal mailbox which I registered with this site.

In essence, the idea behind reaffirmation is to keep some credit cards with some line of credit (equal to the reaffirmed debt, I suppose). Of course, you are able to get approved for some cards after Chapter 7 without reaffirming anything. However, one poster here expressed that American Express never gives credit to anybody who has filed for bankruptcy. For this reason, this is one of the credit cards I want to reaffirm. Again, if you want more explicit details behind my reasoning, please E-mail me.

Bye for now,

Albert

[HHM]

Actually, reaffirmation occurs before discharge. Once a debt is discharged, its discharged. It would be illegal for a credit card company to enter a reaffirmation agreement after discharge. (Technically, its a violation of the discharge provision of the bankruptcy code).

[alberto-2005]

Hello, HMM!

I highly appreciate your response, but I am a little bit confused now. So, how do I handle this? I read that there is period when the credit cards can offer some reaffirmation by mail. When does this happen, then? By the way, my lawyer never told me "anything" about reaffirmation.

Best,

Albert

P.S.: Although this might sound ridiculous, I have read on the Internet that it is possible to keep paying creditors after discharge. I mean, is it illegal that I pay them something? I don't understand why.

[alberto-2005]

P.P.S.: By the way, I don't favor Chapter 13 because after the debt has been paid, all credit cards are cancelled. At least, that is what I have read. On the contrary, reaffirming with Chapter 7 lets you keep some credit cards, meaning the ones which are reaffirmed. And, yes, I can get approved for some credit cards after either chapter, but that is not the case with American Express, and it appears that is also not the case with JCB, and I am sure with other other ones except Visa and MasterCard, and those cards are the ones I like the least. Thanks! Albert

[HHM]

Reaffirmations can be done between the time you file Bankruptcy and your discharge.

What happened to you that you are now considering bankruptcy.

At this point, it appears your priorities are a little skewed. The LEAST of your concerns should be what credit cards you will have after bankruptcy. You have yet to articulate any benefit to doing what you are suggesting. Who cares about AMEX, AMEX cards are crap now a days, pay an annual fee and a higher interest rate for benefits that nearly any dime a dozen card can offer, go ahead.

Honestly, once you re-establish your credit, you will be able to get another AMEX.

What you are proposing makes absolutely no economic or financial sense. Even if you keep the cards, they are going to jack up your interest rates to the same level as any new card would give you after BK.

I am not trying to be mean or disspiriting, but you need to get a little perspective on this.

[alberto-2005]

Hello, HMM!

Thank you for all your help and suggestions. I am much more clear now in respect to reaffirmation.

Certainly, I need to decide what to do, and I value your point of view. I am going to tell my lawyer what you are telling me now.

Well, my story is complicated, but everything started when I lost my roommate and couldn't find a replacement, except temporary ones. From that point on, everything went downhill. One way or another, my spirit is being lifted up a bit with the stories and general support I have been reading here.

Kindest regards to all!

Albert

[HRx]

P.S.: Although this might sound ridiculous, I have read on the Internet that it is possible to keep paying creditors after discharge. I mean, is it illegal that I pay them something? I don't understand why.

Some creditors will accept/cash payments under a account that's been discharged under chp7. Other creditors will simply return your payment. My findings show that the better creditors will return payments made post Chp7.

[HRx]

Hello, 3131tj!

Thanks for your reply.

Let me start by saying, as Todd once said (I think), that reaffirmation is done after discharge, not before.

Nope! It wasn't I that said this.

[alberto-2005]

Hello, Todd!

I happily stand corrected because I should have said "after filing", not "after discharge" as HMM explained.

Todd, what is your experience in regards to reaffirming a debt and Diners Club, Discover, American Express, and JCB credit cards? If I reaffirm part of a credit card (I am not sure yet), it will be with one (or more) among these. Again, Visa and MasterCard are somewhat relatively easy to get after BK. But what about these other credit cards? HMM said that there should be no problem with American Express.

Kindest regards,

Albert