Whether To Reaffirm Your Debts After Bankruptcy-ppbox

Bankruptcy According to John Morgan, a bankruptcy attorney in Fairfax, Virginia who specializes in Chapter 13 and Chapter 7 cases, if youre confused about what it means to reaffirm debt and which debts youre required to reaffirm after filing for bankruptcy, then youre not alone. In fact, Morgan gets asked similar questions from clients all the time. At his practice, John Carter Morgan, Jr. PLLC, he frequently advises clients to think twice before reaffirming any debts that they are not legally required to reaffirm. According to the new law that started on October 17, 2005, you must reaffirm debt on secured property when you file for bankruptcy. But that does not include secured debts, like real estate. Even though I tell my clients that they do not have to reaffirm their real estate debts as a part of the bankruptcy process, many choose to go through with signing the reaffirmation contracts anyway, simply because they do not want to have their banks or lenders upset with them. Debt Reaffirmation Debt reaffirmation is when someone agrees, for a second time, to pay back certain debts. As an attorney in Fairfax, VA, I work with many bankruptcy clients going through Chapter 13 and Chapter 7 filings. When these clients declare bankruptcyand especially the clients declaring Chapter 7 bankruptcythey are being discharged of many of the debts they created up until that point. Many creditors, however, have now gotten a hold of a form that was devised by the U.S. Trustees Office to use as a reaffirmation agreement with their clients. So when a creditor finds out that a person has filed for bankruptcy, that person, or his attorney, may get one of these reaffirmation agreements in the mail. Its my job as an attorney who handles Chapter 13 and 7 bankruptcy cases in Fairfax, VA, to present these agreements to my clients, consult with them about the ramifications of signing them, and then ask them whether they feel .fortable signing the reaffirmations. New Debt Signing a reaffirmation agreement when you dont have tosuch as signing an agreement on an unsecured debtis not always the prudent option. I always put my hand down like a knife on the table, and make sure my clients know that when they file a bankruptcy, all the debt they have created up until that point are discharged or forgiven. But if they reaffirm or modify their loan, then that is a new debt that has to be paid back in full. That is to say, any debt that a person reaffirms will survive the bankruptcy process, and the debtor will still be liable for paying it back. In addition, people who refinance after filing for bankruptcy cannot have any of the debt that was refinanced forgiven. So a reaffirmation is just like creating a new debt, you are reaffirming that you will pay the debt, and it is enforceable. Reaffirmation Agreements I suggest strongly that my clients do not sign the reaffirmation agreements that are sent to them unless they have to. Despite that, many people choose to sign the agreements anyways. Certain agencies and businesses will tell clients that they can expect to receive a lesser quality of customer service if they refuse to sign their agreements. And these businesses will .monly refuse to send statements or give clients helpful service when they call in with questions if they have not signed these reaffirmation agreements. On the other hand, when it .es to loans on personal property items such jewelry, furniture, or vehicles, most lenders will send reaffirmation agreements, which I will go over with my clients to fill in whatever needs to be filled in. Usually, we go over it and fill in the blanks where they need to be filled in as far as where the budget goes and showing the ability to pay. Two Options In my experience, if you do not want to reaffirm your debts, then you still have two options. You can choose to surrender your propertywhich is to give back the vehicle or the jewelryor you can choose to redeem the propertywhich means to pay the fair market value. For example, if you owe $22,000 on a car worth only $10,000, then you can go to another .pany to borrow $10,000 and tender it to your initial creditor. As long as a judge has approved the transaction, the original lender is required to accept the $10,000 payment and discharge the remainder of the loan balance. That is another option that you can choose rather than reaffirming your original debts. This article is for informational purposes only. You should not rely on this article as a legal opinion on any specific facts or circumstances, and you should not act upon this information without seeking professional counsel. Publication of this article and your receipt of this article does not create an attorney-client relationship. About the Author: 相关的主题文章:

 

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