Reaffirm a Credit Card?

[RickInMich]

Well, we dropped off all our paperwork to the attorney's office yesterday. His assistant somewhat put me at ease as she didn't think any of the things I brought up were going to be an issue.

But one thing she mentioned is that our local credit union always shows up, but she doubted that anything would happen since the two things we owe them are 700 overdraft and about 3,300 in credit card. She acted as if this was a small amount. I'm leery about that, though.

Anyway, I did ask her if it's possible to reaffirm those two debts. She said it is, and it could be advantageous since credit unions tend to be a little more flexible post bankruptcy on loans, etc., and that if we reaffirmed and kept current on the payments, that would help our credit score.

Does anyone know if we can reaffirm on those two debts? Is it wise to do so? Would it help our credit score?

Any advice would be appreciated.

[CindyLou]

I would not recommend. The purpose of Bk is a fresh start. You will be able to rebuild regardless! Do not fall victim to the pressure of them showing up. An attorney giving advice to reafirm for the purpose of rebuilding credit, in my opinion, is giving bad advice.

[RickInMich]

Thanks, cindylynnsmith. It was his assistant, and she didn't bring it up at all. Actually, I did. For some reason, I feel bad about that credit union. I've banked there for 25 years. Believe me, I haven't made up my mind yet. I very may well not reaffirm it.

But just in case. Do you or anyone have an opinion on whether the credit union would continue to let us have that credit card if we maintained payments? I mean, I like the idea of having at least one card.

Second, if it is possible to reaffirm a CC, and we did so, are we then obligated on that for sure? In other words, then we could not stop paying on that as it wouldn't be included in bankruptcy?

Most importantly, though, does anyone have an idea or experience on whether they would then be more likely to provide us a loan (like on a car) if we needed it? We're reaffirming our lease on the van, but that lease ends in about 14 months. We'll need something new (used car) at that time.

[CindyLou]

Yes, you are then 100% obligated to pay the total amount due on that credit card. In my personal opinion I would include that credit card and move on to another credit union. For example, Christian Community Credit Union has been giving loans to people on this board as soon as 6 months out of BK for as low as 6.75%...do a search and look at the posts.....you'll be fine in 6 months as longs as you keep your nose clean in the meantime!

If you reaffirm the 3300 balance on that credit card that is a big balance just for the "chance" to get a car loan in the future. Seriously, car loans are not that difficult to get once a BK is discharged. Look at the posts under that category and I think it will make you feel a little better. Take advantage of your fresh start and move on.

As far as needing a credit card, there are plenty you will be able to get after your BK...Orchard, Hooters, Juniper, etc. It may not happen right away, but you will be able to get one. Heck, you would be better off getting a secured card than paying the $3300 on that one! That is a high price to pay just to have a card. Think it through carefully, but I don't think there is even one advantage to reaffirming that debt.

Good luck.

[WantToBeDebtFre]

Rick,

If you feel bad about not paying them back you can still make payments to them even if you don't reaffirm the debt. I know a couple at my church who filed bankruptcy about 15 years ago because their business went under. They paid back every penny over a course of time even though they didn't have to. I think that's very noble of them but sorry to say I won't be doing the same thing. I'm taking my chance at this fresh start. It's all about personal feelings, I guess.

[magyar123]

Unfortunately reaffirmation and payments associated with the reaffirmation will not do your credit history/score any good. The mark "included in bankruptcy" will haunt you until it drops off your credit report - AND no creditor ever reports anything associated with reaffirmation/contnued timely payments.
At least this was my credit union's policy. Reaffirmed my car, and finished paying off the loan within 6 months of filing. Nowhere, on any credit reports, did they ever mention that the account is paid in full. And the loan was paid in full in March 2005.

[jp2861]

I guess the question you need to ask yourself is what will you gain by paying them back. If you pay them back what are they going to do for you? Will they keep giving you credit at the same rates as prior to defaulting? Will they guarantee that they won't ever jack your rates above what someone else is getting? If you don't get aything in return then why pay them. Seperate your emotions from your finances. Bail and move on.

[RickInMich]

Thanks, everyone! I think we've decided to just go ahead and include them. I think when push comes to shove, they won't do us any favors for paying them back. I was thinking they would report that account to the CRAs as paid on time. But it sounds like they wouldn't from what some of you are saying.

Plus, it's not just that 3300. I'd have to pay off my overdraft account which is 700. As I told my wife, 4,000 is a lot of CC debt to have post bankruptcy. We'd be better off using that money so we don't have to charge any more!!

Thanks for the advice!!

[rrockinggramma]

I would just begin a new relationship with a new credit union. From my experience, credit unions' care a lot if you have
BK'd on them in the past. The one we had in Michigan refused to service us at all. For a long time I was afraid to even use their ATM machines. I would definitely include them and just start fresh somewhere else.

[HeatherB]

The overdraft would scare me. If you plan on claiming that (and even if you don't) I would highly suggest you open another checking/savings account. The fact that you have a CC with them could cause them to pull any money you put in your account and keep it.

Before you file, get another bank account if you can. Otherwise, you may find yourself stuck because of the overdraft.