Many people who are considering filing a Chapter 7 bankruptcy are pressured by their secured lender to sign a reaffirmation agreement in order to keep their home, vehicle or other asset. A reaffirmation agreement is a new contract and it makes you liable on the debt, even though you filed for bankruptcy. In other words, it means the secured loan is not eligible for discharge.
In many cases, the debtor does not have to sign a reaffirmation agreement in order to keep their asset. In fact, reaffirmation agreements are not favored by the bankruptcy courts because they contradict the purpose of filing bankruptcy, which is to discharge debt. Thus, bankruptcy judges will not approve a reaffirmation agreement unless it is proven that the new contract is in your best interests.
What can you do to avoid signing a reaffirmation agreement? If you have been making payments on your secured loan, you can continue making your payments and keep the property. You must remain current on your loan payments, but there is no paperwork to file and no hearing before the court. If you continue to make your payments, you will eventually obtain a lien release when the loan is paid.
If you are considering filing a Chapter 7 bankruptcy and you have secured loans, it is important to confer with us before you sign a reaffirmation agreement. We can review your individual circumstances and help you determine the strategy that will be most beneficial for your bankruptcy filing.
Contact The “Milwaukee Bankruptcy Attorneys,” DeLadurantey Law Office, LLC for all your Chapter 7 and Chapter 13 bankruptcy needs. Whether you need debt negotiations or debt relief, or even foreclosure defense, DeLadurantey Law Office will handle bankruptcy matters for the following locations – Milwaukee, South Milwaukee, West Milwaukee, Waukesha City, Waukesha Town, Kenosha, Racine, and all other municipalities in Milwaukee County, Waukesha County, Kenosha County, and Racine County. DeLadurantey Law Office, LLC can be contacted by phone at (414) 377-0518.