When you file for bankruptcy, you’re taking the steps required to manage your debts or wipe them from your slate completely. Chapter 7 bankruptcy requires that you sell off many assets to satisfy your creditors, but what if there is property that you want to keep and you are confident that you will be able to pay the debt associated with it? That’s when you ask a Bergen County Chapter 7 bankruptcy lawyer about drafting a reaffirmation agreement.
What Does a Reaffirmation Agreement Do?
A reaffirmation agreement is a voluntary agreement that allows you to keep a debt and continue paying for it. So if you file for Chapter 7 bankruptcy and begin selling off your assets, you can ask to keep a particular asset and keep making payments on it.
This is usually done for bigger items, like cars and homes. If you agree to keep making loan or mortgage payments, you can often work out a deal to keep the debt and the associated asset. You just have to be careful about this. If this was the debt that was causing you financial stress, you may find that it continues to be a problem after your bankruptcy filing. This can be especially true for filers who have other debts that are not dischargeable through bankruptcy, like back child support or student loans.
How Can I Ask For a Reaffirmation Agreement?
When you are sure that you want to keep an asset and that a particular debt will not be burdensome, your lawyer can help you draft a reaffirmation agreement. This must be submitted to a creditor within 60 days of the meeting with creditors. You have to do this before your case gets discharged. If you wait too long to act, you are not going to be able to ask for a debt to be reaffirmed.
You may have to appear in court to have your agreement reviewed. This is another reason why it’s wise to hire a lawyer during this process. Once your agreement is filed properly, you can keep this debt and keep making your payments even as other debts get wiped away.
Can a Creditor Make Me Sign an Agreement?
It’s important to remember that a reaffirmation agreement is voluntary and must be initiated by a debtor. A creditor cannot come to you during your bankruptcy and ask you to sign such an agreement. You get to decide which debts are reaffirmed, not your lenders.
Contact Our Law Firm
If you are thinking about filing for bankruptcy, contact the Law Office of Boyd & Squitieri. Our attorneys can tell you more about this process and whether it’s the right move for you in your financial situation. If you’re a good fit, we can help you make your bankruptcy filing go as smoothly as possible.
