If you are behind on a car loan or home mortgage and you can afford to catch up, you can reaffirm and possibly keep your car or home. If you choose to reaffirm a loan, you agree to be legally obligated to pay the loan, despite filing bankruptcy.
If the lender agrees to give you time to get caught up on a default, this may be a good reason to reaffirm. But think about this: if you were having a hard time keeping up with your payments before you filed bankruptcy and you are still struggling making ends meet, reaffirmation may be a mistake.
If you reaffirm, the debt will not be canceled by bankruptcy. If you fall behind on a reaffirmed loan, you can get collection calls, be sued, and possibly have your wages garnished or other property taken, such as money in a bank account.
If you are up to date on your loan, you may not need to reaffirm to keep your car or home. Some lenders will let you keep your property as long as you continue to make your payments. Sometimes lenders will do so if they think the bankruptcy court will not approve the reaffirmation agreement.
To learn more about whether or not Chapter 7 bankruptcy or Chapter 13 bankruptcy is your best option, schedule your free, confidential bankruptcy consultation with a Colorado bankruptcy attorney today. Our online scheduling system allows you to schedule a bankruptcy consultation at a time that is convenient for you.
Colorado Bankruptcy Law Group, LLC is a personal bankruptcy firm serving clients in the greater Denver area.