“Reaffirmation of a debt” is probably one of the most common events that happen when someone is filing for bankruptcy protection. Few families are able to function effectively in today’s society without access to basic modes of transportation and obtaining another auto immediately following a bankruptcy can be extremely difficult because of limited financial resources and potential credit issues.
Should you reaffirms a debt and then realize later that you can no longer keep up with the monthly payments, the debtor will lose the vehicle and will likely be subject to a deficiency judgment. When you file for
Chapter 7 bankruptcy, you must wait eight years before you are eligible to files for Chapter 7 debt relief.
If a person reaffirms a secured debt but is unable to make the payments, the vehicle can be repossessed.
Since the debtor cannot file another Chapter 7, the vehicle finance company may obtain a deficiency judgment for the difference between the value of the vehicle and what was owed.
If the debtor cannot work out an accommodation with the finance company, he or she may face a wage assignment or bank levy.
Another consideration before signing a reaffirmation agreement is that most financed vehicles will be upside down (i.e. more will be owed than the vehicle is worth). If the vehicle is worth significantly less than is owed, it may not make economic sense to reaffirm the obligation.
The bankruptcy trustee will also carefully scrutinize a reaffirmation agreement to ensure that it does not create an unreasonable financial burden on the debtor and the debtor’s family or constitute an unfair transaction.
Kansas bankruptcy attorney can carefully scrutinize a potential reaffirmation agreement and advise you regarding the advantages and disadvantages of reaffirming the debt as well as the fairness of the specific terms of the reaffirmation agreement.
You are invited to contact Kansas Bankruptcy attorney Rick Hodge. We have helped many people all over Kansas with their bankruptcies.
We will answer your questions and help you file the petition from your own home.
You will only need to leave your home to attend the Meeting of Creditors in Wichita 30 days after filing.