What is a Reaffirmation Agreement?
A San Jose bankruptcy attorney answers the questions: What is a reaffirmation agreement?
In a chapter 7 bankruptcy, a debtor may wish to keep a house or car or other secured assets. Because of the nature of a chapter 7 bankruptcy, i.e. a liquidation of all assets and liabilities, a creditor and debtor need to come to an agreement and understanding regarding the debtor’s continued personal liability for the debt. A reaffirmation agreement must be entered into prior to the chapter 7 discharge.
The reaffirmation agreement must contain specific disclosures which advises the debtor of the amount of the debt being reaffirmed and how it is calculated and that reaffirmation means that the debtor's personal liability for that debt will not be discharged in the bankruptcy. The disclosures also require the debtor to sign and file a statement of his or her current income and expenses which shows that the balance of income paying expenses is sufficient to pay the reaffirmed debt. If the debtor is not represented by an attorney, the court must approve the reaffirmation agreement. If the debtor is represented by a bankruptcy attorney, the attorney must put in writing that he or she advised the debtor of the legal consequences of signing the reaffirmation agreement.
In the end, whether or not the debtor signs a reaffirmation agreement comes down to how badly they want the property and whether or not they can afford to continue the monthly payments.
If you have questions regarding Bankruptcy in San Jose please contact us at 408.279.2288 for a free consultation or visit www.bkanswers.com and we can connect you with one of our experienced San Jose Bankruptcy Attorneys. After you have spoken with one of our downtown San Jose bankruptcy attorneys, we can schedule you for a free face to face appointment in an office location nearest you. Our team of San Jose Bankruptcy Lawyers can assist you with all aspects of your bankruptcy or bankruptcy litigation case. If you have questions about filing a Chapter 7 bankruptcy, a Chapter 11 bankruptcy, a Chapter 13 bankruptcy, or would like to learn more about bankruptcy litigation, legal debt settlement, mortgage modification, lien stripping, cram down, stopping a foreclosure, wage garnishment, asset protection, discharging a debt, etc. we can help! We have bankruptcy attorneys located throughout California and Oregon who can assist you with all of your debt resolution questions. Please feel free to complete our free online bankruptcy evaluation and we can quickly determine if you are a qualified candidate for bankruptcy. We look forward to hearing from you, San Jose and the South Bay!
