Question: What Happens If You Don’t Sign A Reaffirmation Agreement??

If no signed reaffirmation is filed, then the bankruptcy rules prevail — and the creditor has the right to repossess collateral, as long as it’s non-exempt property.

If the court discharges the debt, then you can keep your property and no longer need to make payments.

Can I trade in my car after reaffirmation?

And with reaffirmation, the lender won’t be permitted to repossess the vehicle as long as you’re making payments. But if you miss payments after your discharge, you will be in a bad position. At this point, the car can be repossessed and the lender can sue you for a deficiency balance.

Is a reaffirmation agreement necessary?

As a promise to pay that debt, a debtor must enter into a reaffirmation agreement with the creditor. Reaffirmations are voluntary and not required by law. It is recommended that the debtor carefully consider whether or not the agreed upon payments can be made before entering into a reaffirmation agreement.

How do I reaffirm a car loan?

When you reaffirm a car loan in bankruptcy, you sign an agreement with the lender that you will continue to pay for the car as if you had not filed bankruptcy in exchange for keeping it. To reaffirm a car loan, you must be able to show the court that the vehicle is necessary and that the payment is reasonable.

How long do I have to file a reaffirmation agreement?

An executed reaffirmation agree- ment may be filed by any party, including the debtor or a creditor. It must be filed within 60 days after the first date set for the first meeting of creditors in the bankruptcy case unless the deadline is extended by the bankruptcy court.

What happens if I don’t reaffirm my mortgage?

A reaffirmation agreement with a mortgage lender means you agree to keep up payments, and that the court will not discharge the loan. Since the lender will still have a lien on the property, however, you risk foreclosure if you cease payments after the bankruptcy, with or without a reaffirmation agreement.

What happens if I do not reaffirm my car loan?

The bankruptcy cancels your legal liability to pay on the car. Failing to complete the reaffirmation will allow the lender to repossess the vehicle after your bankruptcy is completed. If that does happen, you will not be liable for the remaining balance because you did not reaffirm the loan.

Does reaffirming help credit?

Reaffirming Helps to Rebuild Your Credit

This means that the timely payments you make will not help you in establishing a good credit history after bankruptcy. If you reaffirm the loan, your lender will continue reporting your payments which will help you in establishing good credit.

Can you keep a financed car in Chapter 7?

The motor vehicle exemption helps you keep your car, truck, motorcycle, or van in Chapter 7 bankruptcy by protecting equity in a vehicle. If you’re behind on your car loan, you can’t keep your car unless you work out a plan to bring your payments current before you file for bankruptcy (more below).

Should I sign a reaffirmation agreement?

If you do not sign a reaffirmation agreement, making on time payments will not help your credit score. The Bankruptcy Code says that if the debtor does not sign a reaffirmation agreement on personal property, the secured creditor may repossess their collateral at any time, regardless of payment history.

Can I file a reaffirmation agreement after discharge?

Reaffirmation agreements must be signed before the debtor gets his discharge in the bankruptcy. That normally takes place about 60 days after the meeting of creditors. However, a minority line of courts has allowed the debtor to vacate the discharge and file a reaffirmation agreement.

How do I get a reaffirmation agreement?

Reaffirmation is the process wherein you agree to remain responsible for a debt so that you can keep the property securing the debt (collateral). You and the lender enter into a new contract—usually on the same terms—and submit it to the bankruptcy court.

Photo in the article by “Department of Commerce – Commerce.gov” https://2010-2014.commerce.gov/blog/category/2438.html