Reaffirmation
Good afternoon, everybody. Edward Kelly, your bankruptcy attorney here, coming to you live from the attic again in our continuing series, Three Minutes to Financial Freedom.
In today’s video, we’re going to do an overview of reaffirmations in Chapter 7 bankruptcy. So, what’s a reaffirmation? Well, you can think of it as taking your debt back out of bankruptcy.
Why Reaffirming Your Debt is Important
The bankruptcy laws require that you list all debts, including if you’ve got a car note. So a lot of people say, hey, I want to keep my car, I’m current on it, I don’t want to lose it. That’s no problem, but what you have to do in order to be safe is reaffirm that loan, meaning take it back out of bankruptcy.
Well, how does that work? Well, you’ve got to basically sign a new note. However, I do that for you. Some bankruptcy attorneys don’t, but it’s a document that has to be filed with the bankruptcy court. It’ll list your interest rate, it’ll list all of your payments, and list the remaining balance. Again, it’ll essentially be another note.
The Process of Reaffirmation
The creditor, whoever has your car note, I’ll ask for it, they’ll send it, I’ll send it to you, you’ll make sure everything’s correct, and then you’ll reaffirm it. You’ll sign it, I’ll file it with the court, and then that loan is taken out of bankruptcy.
The effect of that is if two years from now you get behind on payments and they repossess the car, they can once again sue you and go after you personally, even after they repossess the car. If you do not reaffirm, all they can ever go after is the car.
Why You Should Reaffirm Your Debt
Now, it used to be that most car dealers would never go after the car as long as you made the payments. However, they are allowed to. Any personal property, including a vehicle, can be repoed, even if you’re current if you don’t reaffirm your personal liability. That’s a protection for the creditor.
So now, increasingly, even for people who are current, these companies will repo that vehicle. So, if you want to be safe, you’ve got to reaffirm it. That’s a service that I provide, included in the cost of the bankruptcy. Be sure and ask your attorney if they do that.
Take Control of Your Finances Today
This has been an overview of reaffirmations in Chapter 7 bankruptcy, which, by the way, must be filed during that 90-day period of the bankruptcy, once your discharge is too late.
And this is our continuing series, 3 Minutes to Financial Freedom. As always, you can reach me at oklahomacitybankruptcyattorney.pro or call me at (405) 563-7888 to schedule a free consultation.