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What Does Reaffirmation Mean in Bankruptcy?

What Does Reaffirmation Mean in Bankruptcy?

: Richard West Law Office

bankruptcy termsThere may be some situations where under a Chapter 7 Bankruptcy that you want to continue paying on a debt, and don’t want it included in the bankruptcy. It may be that you need and want to keep your vehicle which you still owe money on. If you decide to keep paying this debt then it becomes a reaffirmation. If there has been a lien placed on any collateral that allowed you to finance the car it will remain in place, plus you will continue to be personally liable for the debt. There is a possibility that you may be able to negotiate new terms under the reaffirmation agreement.

Why or Why Not?

There are advantages and disadvantages to reaffirmation. It is one way of making sure that you can keep the property it is applicable to. It may also open doors for you to negotiate better rates or payments. The downfall is that because it has not been part of your bankruptcy proceedings, then you are committed to the payment of the debt. If you default then you are subject to the repercussions, most likely of seizure and sale of the specific property that the reaffirmation was applicable to. There are a lot of decisions and things to be aware of in a bankruptcy, and for these reasons it really is important to be able to rely on an experienced bankruptcy lawyer that is going to look at your specific needs and requirement, that are best for you under the bankruptcy relief.

If you are considering including this as part of your bankruptcy proceedings it really is important to discuss the pros and cons of this type of action with your Springboro bankruptcy lawyer.