If you are filing for bankruptcy and want to keep your vehicle or another secured asset, you will be required to enter into a reaffirmation agreement with the creditor. A reaffirmation agreement promises the creditor that you will continue to make payments on the secured asset you want to keep and in turn the creditor will not take the property back from you.
Many attorneys agree that its best to discharge all your debts in your bankruptcy to get a fresh financial start. Reaffirming old debts could put the debtor back into a quagmire of financial strain.
If you truly want to keep the asset and intend to make all timely payments than a reaffirmation agreement makes sense. If you are not represented by an attorney, the judge will make the ultimate determination as to whether you should keep the said property and whether doing so imposes an undue burden on you or your dependents.
A reaffirmation agreement must be completed before the discharge of our bankruptcy. You are not required to sign a reaffirmation agreement with any creditor as the process is strictly voluntary. Further, you do have the legal right to cancel your reaffirmation agreement, within the time allotted, if you so happen to change your mind.
Think carefully about which assets you intend to keep and whether the secured asset is worth it to reaffirm the debt. Often, clients have an emotional connection to a vehicle or asset they are paying way too much for to keep. In many instances, the best option is to let the property go and enter into new terms with another creditor at a much lower price.
If you have questions regarding a reaffirmation agreement in your Chapter 7 bankruptcy or Chapter 13 bankruptcy, contact an experienced Los Angeles bankruptcy lawyer at Sky Law Group today!
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