The Pros and Cons of Reaffirming a Debt in Bankruptcy
When you reaffirm a debt, you sign a contract to continue making payments to the lender. Think of this contract as taking your vehicle loan or mortgage totally out of the bankruptcy. This means that if you ever stopped making payments on the debt, the lender would be able to repossess the vehicle and collect the balance owed from you.
There are several pros to signing a reaffirmation agreement. First, since the debt does not show as discharged on your credit, you will continue to receive the positive impact on your credit from timely monthly payments. Also, since we are doing a great benefit to the lender by making it so that you cannot walk away from the vehicle in the future, lenders are often willing to negotiate better terms on your existing loan. We can often get interest rate deductions which help make your monthly payments more affordable, and can sometimes get principal balance reductions too. You also have the security of knowing you are complying will all laws, so the lender cannot repossess the vehicle unless you stop making your payments.
The main down-side of the reaffirmation agreement is that you are stuck in the loan in the future if you later can't afford to pay.
All reaffirmation agreements require our office to prepare an agreement reaffirming the loan which must be signed by your attorney, you, the lender, and a bankruptcy Judge. You must also attend a special court appearance with the attorney to get the agreement
approved by the court, and must be able to prove to the Judge that you have the ability to pay this loan each month. These extra steps are why our office charges additional fees for this work.
For more information about reaffirmation agreements of the bankruptcy process, please call Kristy Hernandez, Sacramento Bankruptcy Attorney for a free consultation at 510-456-7400 or visit her at http://www.khernandezlegal.com
Questions and Answers
Bankruptcy is a situation that is not an area specific, but everyone belonging to any part of the world can be into this kind of situation. Bankruptcy is a term used to denote a situation when you become so weak economically and financially that you don't even have finance to pay your major bills and debts.
In today's economic downturn, a lot of people are facing financial problems. There are many things people have to spend on, such as basic commodities, bills and luxuries.
In 2005, new bankruptcy laws were enacted by Congress under the Bankruptcy Abuse Prevention and Consumer Protect Act. Nearly 6 years later, consumers are still confused about BAPCPA and how it forever changed their opportunities to obtain debt relief.
Massachusetts Bankruptcy and Bankruptcy Law has offered you state of the art legal help to get rid of your debt with dignity.
McDaniel has been practicing bankruptcy law in Arizona since 1980. Having helped countless people throughout Maricopa County find the right debt relief solution to fit their needs, the firm is prepared to help clients with all their bankruptcy law concerns, including Chapter 11, Chapter 13, Chapter 7, credit card debt and several other areas.
Filing bankruptcy is a serious business that should only be undertaken when there seems to be no other options. Though the new laws are tougher than the older laws, the fact is that they do not hinder legitimate consumers and businesses from getting the relief they need.
Many people who enter the bankruptcy process worry about the fate of their credit. This is actually unnecessary as the bulk of credit damage happens before the bankruptcy process is even initiated. While no one wants the added hassle of rebuilding their credit after resolving debt troubles, doing so can put you leaps ahead of others in the credit game.
Americans are now filing Chapter 7 or 13 Bankruptcy to get their debts under control. Bankruptcy in itself is designed for debt elimination. Chapter 7 bankruptcy functions to cancel out unsecured debt such as utility or medical bills, credit card, etc. Chapter 13 Bankruptcy on the other hand is designed to give individuals more time in repaying all their debts.
Filing for bankruptcy is good news whenever you are struggling with your credit card debt, mortgage or medical bills. Bankruptcy laws help families and individuals in their debt struggles. You have two options on how to deal with your debt problems, Chapter 7 (debt elimination) and Chapter 13 (reorganization). Always remember that you can regain credit again after successfully filing your bankruptcy.
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One shouldn't be living like a movie star. Spending as much as you have and saving some money can help to lead a debt free life.
In my years of experience practicing bankruptcy, I have seen clients file bankruptcy cases for many different reasons. But, for me, the most frustrating trend is the very high number of clients who seek bankruptcy advice after working with debt consolidation companies.
Why do homeowners insist on hanging on to their homes when they are hundreds of thousands of dollars upside down in their equity
CAN I BE FIRED FROM MY JOB FOR FILING BANKRUPTCY? WILL FILING FOR BANKRUPTCY HURT MY CHANCES OF FINDING A JOB? Bankruptcy attorneys are often asked whether someone can be fired from their job if they file for bankruptcy. The short answer is NO.
When you file a bankruptcy case, you are required to value all of your vehicles. When your vehicle is worth less that what you owe on it, it is possible to do a redemption.
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