Life doesn’t come to a halt just because you file Chapter 7 bankruptcy. You still need a car. You still need a place to live. In order to keep these items, and anything else you purchased with a security agreement, you may need to sign a reaffirmation agreement.
A reaffirmation agreement is a contract between you and the moneylender. It basically states that you agree to keep making the installment payments, and the moneylender agrees to let you keep the collateral. Reaffirmation agreements are required under the revised Bankruptcy Code.
Your attorney may be able to renegotiate the terms of the purchase, such as the interest rate. The reaffirmation agreement must also be approved by the judge, who must be convinced that you will be able to afford the payments.
As always you should go over any agreement with your attorney before you sign it. The bankruptcy lawyers at Henley and Henley, P.C. can advise you about all the consequences of reaffirming a debt, including the possibility of a deficiency lawsuit later down the line.
The reaffirmation agreement is just one tool to help you achieve a clean discharge of your debts while you retain the things you need to retain. Call today for your free consultation.