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Bankruptcy Resources
Jan 19, 2015

Reaffirmation Agreements

By: Julie Koenig

If you have a vehicle that is financed and you want to keep the vehicle, you will be required to reaffirm that particular debt.  By reaffirming a debt you agree that you remain legally obligated on that particular debt and must repay it in order to get clear title to the vehicle when it is paid off.  You must reaffirm any vehicle debt within 30 days from your 341 meeting.  You have an additional 60 days or until the date of your discharge to change your mind and revoke the reaffirmation agreement.  This must be done in writing.  Failure to reaffirm a vehicle debt will result in that vehicle being repossessed after you receive your discharge with no warning to you.  We work with the various lenders to obtain reaffirmation agreements prior to the 341 meeting.  Charlene, my paralegal, will meet with you to obtain your signature(s) on the agreement - we strive to make this a simple a process as possible.

Houses do not have to be reaffirmed unless you desire to do so and the creditor will allow it.  Under the Bankruptcy Code home mortgages “flow through” the bankruptcy.  However, it has become the practice of mortgage companies to stop keeping a payment history for individuals who do not reaffirm their mortgage which makes it nearly impossible to refinance your home after you get a discharge.  They will accept your payments and release the mortgage lien on your home once the lien is paid off, but when contacted by a new mortgage company for refinance or home equity loans, your original mortgage company will state they have no record of your personal payments which complicates the refinance or equity process.   Therefore, I reluctantly advise you to reaffirm your mortgage if you intend to keep your home.

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