Newnan, Georgia (GA) Bankruptcy Information – What are reaffirmation agreements?

Introduction to reaffirmation agreements in Newnan, Georgia (GA) Bankruptcy Cases

Reaffirmation agreements are agreements that make you liable for a debt even when that debt has been listed in your bankruptcy case. When you file a chapter 7 bankruptcy case in Georgia, all of your debts must be included in your bankruptcy petition, including the debts for your house and cars. If you do nothing else, you will not owe the mortgage company or any lender who has a loan on any of your cars if you take no further action and your debts get discharged. However, if you sign a reaffirmation agreement, you have essentially pulled the reaffirmed debt back out of the bankruptcy case.

If you do not wish to keep your cars or your home, then you have no concerns. You have probably quit making your payments and have either turned your car in or are waiting for the loan company to pick it up. Likewise, if you are not keeping your home, then you are probably staying in it as long as possible, but have made plans to move.

But what if you do wish to keep a home or a car after a chapter 7 bankruptcy case? You have some decisions to make regarding reaffirmation agreements and if you intend to keep your house or car, you must keep making your payments whether you sign a reaffirmation agreement or use a different tactic.

Secondly, you must decide whether to sign a reaffirmation agreement. A reaffirmation agreement makes you liable for whatever debt you reaffirm. In other words, you now owe the debt again even though you have received the bankruptcy discharge.

As you might imagine, reaffirming a debt is a serious matter and must be given very careful consideration. Bankruptcy lawyers have different opinions about reaffirming debts. Some bankruptcy attorneys have their clients reaffirm both houses and cars if their client intends to keep them. Other bankruptcy attorneys prefer for their clients to not enter into any reaffirmation agreements. And still other bankruptcy lawyers will have their clients reaffirm debts on vehicles but not on homes and real estate. The law in your state may also determine the views of your attorney.

Regardless, reaffirming a debt is a major decision and must not be taken lightly. You must have a conversation with your bankruptcy lawyer about the pros and cons of these agreements. Your attorney must also agree with your decision. If your bankruptcy attorney does not agree, the reaffirmation request must be heard and approved by the bankruptcy Judge.



by Rick Palmer

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