Reaffirmation Agreement

[ifly2007]

We signed put petition yesterday for ch7 and for our 2 cars it was marked off as reaffirmed. Is it the same as retaining the vehicle/continue making monthly payments? 1 car i have my step dad co-signed me on this that why i really can't give up this car. Do we really have to reaffirm this? is that an advantage? Any advise would help.

[rrockinggramma]

if no reaffirm is required, then I would just pay and retain.

[Bob Walker]

Pros and Cons

Can someone please bullet point out the Pros and Cons of a Reaffirmation Agreement in regards to a Ch 7?

[ameliabedilia]

Can someone please bullet point out the Pros and Cons of a Reaffirmation Agreement in regards to a Ch 7?

If you want to reaffirm a debt, like a car that you need then that is a good thing to do if you can still afford the payment. What people are talking about here is pay and retain, which is you try to slide by with not signing the reaffirmation agreement but you keep your payments current. This used to be called a "ride through" and was allowed before the new laws took effect. This is the best thing to do only because if you find that you cannot afford the payment a few months down the road, you can turn the car in walk away from it. Really it is best practice to decide if you can afford the item in question- typically a car and if you can keep paying it. Lots of people are upside down in cars and it is a gift to be able to get out an expensive monthly payment if possible. Especially if you are willing to buy a less expensive, used car that will not hinder your fresh start.

[CindyLou]

We signed put petition yesterday for ch7 and for our 2 cars it was marked off as reaffirmed. Is it the same as retaining the vehicle/continue making monthly payments? 1 car i have my step dad co-signed me on this that why i really can't give up this car. Do we really have to reaffirm this? is that an advantage? Any advise would help.

Maybe someone here can chime in and comment on this. I am wondering it the car you have with your dad as co-signer would need to be reaffirmed to keep his credit form being affected?? Or would the OP just need to keep the payments current? It seems I remember something about a co-signer loan needing to be reaffirmed....anyone??

[keepmine]

The real "con" in a reaffirmation agreement is, if you stop making payments, the car is repoed and you are on the hook for any deficiency balance.

[ssdsco]

I'm not aware of any pros. From what I've read you'd only want to reaffirm a car or a house if forced by the lender to do so. Even then only reaffirm if it's a good business/financial decision.

[gwg]

Reaffirmation Agreement

(filing pro se in a few weeks in IN...not an atty...based on research)

In regards to relative as Co-Signer....I would definitely reaffirm for "their" sake. You don't want a "Borrower discharged by bankruptcy" on their report, plus they will definitely be "solely" responsible for the debt. Overall, bad faith. Depends on your relationship....can hurt it if not reaffirming.

In regards to Pros and Cons of reaffirming....assuming you CAN make the payments and/or get caught up quickly.....First, and foremost, thing to consider is market value vs balance (equity).

Therefore, if you owe MORE than what property is worth (market value)...I WOULDN'T reaffirm. Why? You can keep property, as long as you make the payments. But, if you default on payments, you WON'T owe the difference. The Lender WILL WANT you to reaffirm, because they know you'll owe them the difference if you reaffirm and then default. However, this does give you negotiating power for lower payments.....resulting in reaffirmation.

However, if you owe LESS than property's market value, reaffirm the debt so it won't be reported as discharged on credit report (higher score) and life goes on as if you didn't file. Chances are it will be tougher to negotiate with Lender because they know you are willing to reaffirm and CAN make the same payments. But, it can't hurt to try.