question about reaffirming debt

[amjo30]

When does the reaffirming of a debt occurs? Is it done after the 341 meeting or is there a special form my attorney completes and submits with the petition? I reviewed my petition and I don't see any paperwork for keeping my car and home.

[StartingOver08]

On your Statement of Intentions (in your petition) did you select "reaffirm" for your car and home? If so, then the reaffirmation is usually prepared by the creditor and sent to your attorney. If you are looking to change the terms of the agreement, contact the BK dept of the creditor to negotiate. I know you can do that with the car, depending upon the creditor. I don't know if that will work with the house.

[amjo30]

the mortgage is being paid outside the plan and is current. The auto is being paid within and will be crammed down. I owe $21,000 and the car is worth $14,000. My lawyer filed the petition but I noticed a few errors on the papers so he held off from sending the entire package.

[jgarton244]

Reaffirmation is only used in a chapter 7 BK. Definately do not want to sign one for the auto, or you will not be able to cram down the loan. Do not sign any reaffirmation papers. Since you are filing a BK 13, no property is being forfeited, or home foreclosed so their is no reason for a reaffirmation of debt.

Please consult your attorney on this.

[amjo30]

thank you so much, I was just wondering why my attorney did not mention it because he did say the vehicle will be crammed down at our first meeting.

[Flamingo]

As with us, your vehicle will be crammed into your Plan. When your vehicle is paid off you will receive the title directly from the lender. Both our vehicles (we had two crammed vehicles) were paid off prior to the end of our Plan.

[StartingOver08]

Sorry OP, ignore what I said earlier - I didn't see that this is the Ch 13 forum.

[lrprn]

Reaffirmation is only used in a chapter 7 BK.

This is *NOT* corrrect. Ch 13 assets also are to be declared as reaffirmed, redeemed, or surrendered as well.

Please consult your attorney on this.

This I agree with

[justbroke]

Just adding to what lrprn wrote...

While Chapter 13 does have a reaffirmation, it is only technical in nature. There is no reaffirmation agreement as done in a Chapter 7.

The purpose of declaring reaffirmation, surrender or redemption in a Chapter 13, is to put the creditor on notice as to your disposition of the asset as part of your Plan of Reorganization.

Simply put, you say whether you're going to keep, return, or purchase the item.

Keeping (re-affirming) the item requires you to file a Plan which provides adequate protection as well as payments to the creditor.

Returning (surrendering) requires you to abandon and/or surrender the property to the creditor.

Purchasing (redemption) requires you to provide fair market value for the property to the creditor, immediately. This can not be paid "through" the Plan.

Hope that makes sense!