Understanding Reaffirmation Agreements
In a Chapter 7 bankruptcy, the debtor may discharge certain unsecured debts completely, such as credit card debts and medical bills. A debt that is secured by an asset can also be discharged, but the debtor must give up ownership of the asset, unless the creditor agrees to a reaffirmation agreement.
A reaffirmation agreement can therefore allow the debtor to retain an important asset, such as a car, while obtaining the debt relief benefits of Chapter 7 bankruptcy. It must be negotiated and reached before the final discharge of debts in a Chapter 7 bankruptcy.
At Prescott & Pearson, P.A., we regularly advise our clients about reaffirmation agreements in the course of providing bankruptcy representation. While banks and lenders routinely agree to reaffirmation agreements, there are numerous conditions and timelines that must be met for a reaffirmation agreement to be valid. You should consult with an experienced attorney.
In a free consultation, Prescott & Pearson, P.A., can review your situation, answer your questions and explain how we can help you. Contact our firm today.
Keeping Your Vehicle and Your Vehicle Loan
Most lenders are amenable to reaffirmation agreements for vehicle loans because it spares them the expense and hassle of taking possession of the vehicle.
Reaffirmation agreements are most commonly employed to enable a debtor to retain possession of a vehicle purchased on credit. While you may place a priority on retaining such an asset, you must be sure that you will be able to afford the payments on the loan. If you are currently employed and feel secure in your job, and the payment clearly fits within your monthly budget, you may wish to consider reaffirming your loan.
Prescott & Pearson, P.A., has extensive experience in debtor and creditor agreements. A lawyer at our firm will closely examine your income and your expenses to make sure that you will be able to make the payments on your vehicle loan.
Free Consultation — Contact Us Today
For a free consultation about a reaffirmation agreement, contact the Minneapolis bankruptcy attorneys at Prescott & Pearson, P.A. We serve clients throughout Minnesota.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.